Startup News Digest 04/17/26
The Big Story: Startup founders come to D.C. calling for expanded capital access policies
This week, startup founders from across the country came to Capitol Hill to meet with policymakers, highlighting the barriers they face accessing capital and sharing how current policy frameworks shape their ability to grow their businesses. Access to capital remains the first and one of the most significant barriers startup founders face, and policymakers must take a multi-pronged approach to addressing it by expanding the pool of eligible investors, supporting exit opportunities, and making federal grants more accessible and sustainable.
In meetings and panel conversations throughout the week, founders asked policymakers to make several changes to improve the capital formation landscape for startups. To expand the pool of eligible investors, the Senate should pass legislation to change the “accredited investor” definition so that more people qualify to invest in early stage startups. Provisions to expand that definition—including letting people qualify based on their education, experience, and certification, as opposed to the current wealth and income limits—were included in the House-passed Incentivizing New Ventures and Economic Strength Through Capital Formation Act (INVEST Act). Founders also stressed the role of non-dilutive government grant programs, including the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, which—after an unprecedented five-month lapse—were reauthorized last week. Many founders also pointed to the importance of acquisitions as the most common startup exit, emphasizing how these transactions recycle capital, talent, and knowledge back into the ecosystem, and raised concerns about proposals that could make it harder for startups to be acquired. And to support startups, policymakers should preserve and even expand the Qualified Small Business Stock (QSBS) tax treatment, which is often misunderstood as just a benefit for wealthy investors, but in reality, it is a useful tool for startups to recruit both investors and talent.
While policymakers have embraced the importance of supporting startups, there is no single policy solution that will address the barriers founders face, especially when it comes to expanding opportunities for capital formation. Given the breadth and diversity of the startup ecosystem across the country—and the fact that every founder’s fundraising journey looks different—lawmakers must take an all-of-the-above approach to expanding access to capital—from broadening investor eligibility and strengthening early-stage funding pathways to preserving acquisition opportunities and improving incentives—if they want to see the startups in their districts and states succeed.
Policy Roundup:
Vote on long-term extension of controversial spying power fails. Early Friday morning, House lawmakers rejected a bill to extend the surveillance authorities under Section 702 of the Foreign Intelligence Surveillance Act through October 20, 2027. Instead, lawmakers agreed to a ten-day extension of the law that is set to expire on April 20. The law authorizes the U.S. government to compel American companies to turn over foreign communications without an individualized warrant, and it has long complicated transatlantic data flows, creating uncertainty for startups that move data between the U.S. and Europe. As we recently explained, without meaningful reforms, the law's broad surveillance powers could drain the limited resources startup founders depend on, erode user trust online, and further complicate the already fractured digital trade landscape.
FTC leadership calls for federal privacy law. In a wide ranging oversight hearing held by the Senate Commerce Committee this week, Federal Trade Commission Chair Andrew Ferguson urged Congress to pass a federal privacy framework that would provide clarity and consistency for companies and consumers, which would help minimize unnecessary compliance costs for startups. Ferguson also warned against overly broad generalized AI regulation, which he called “a recipe for killing innovation.”
House committee explores impact of tax changes on small businesses. The House small business committee held a hearingon tax day focused on the impact recent changes to the tax code have had on small businesses and startups. Members and witnesses underscored the importance of restoring full, immediate expensing for research and development (R&D) expenditures—and making it permanent so businesses do not again find themselves in a similar situation to recent years when that tax treatment expired. That tax treatment frees up startups limited capital for them to spend on further R&D, hiring, and other investments.
Bill advances requiring warning labels for user-generated content sites. The Senate commerce committee on Tuesday advanced the Stop the Scroll Act to the Senate floor. The bill requires certain online services that host user-generated content to show users under 18 mental health warning labels. Industry groups have sued over state legislation with similar provisions, calling the requirements unconstitutional “compelled” speech.
On the Horizon:
TUE 04/21: House Committee on Small Business will convene a hearing on the gig economy and the future of entrepreneurship at 10:00 AM ET.
WED 04/22: House Committee on Ways and Means will convene a hearing on the Trump administration’s 2026 trade policy agenda with U.S. Trade Representative Jamieson Greer at 10:00 AM ET.
THU 04/23: The Senate Finance Committee will convene a full committee hearing on the President’s 2026 trade policy agenda at 10:00 AM ET.
Startup Roundup:
#StartupsEverywhere: Burlington, Vermont. Sascha Mayer, Co-founder and Chief Experience Officer of Mamava, is closing the gap in support for breastfeeding parents with freestanding lactation pods. Based in Burlington, Vermont, Mamava provides private spaces in high-traffic areas like airports and workplaces, paired with a mobile app to help parents find them. We sat down with Sascha to discuss how design meets policy, the realities of U.S. manufacturing, and the importance of policy that supports parents.