House passes bill aimed at helping startups

The House on Tuesday passed a bipartisan bill aimed at making it easier for startups to get capital from wealthy “angel investors.”

The measure passed by a vote of 344-73. The House previously passed the bill last year, but it did not receive a vote in the Senate.

The bill would make it easier for angel investor groups to host “demo days” where startups showcase their products. It would direct the Securities and Exchange Commission to exempt demo days hosted by colleges, nonprofits and angel investor groups from requirements for general solicitations of capital.

House Financial Services Committee Chairman Jeb Hensarling (R-Texas) said that the bill “provides an important regulatory solution to make it easier for small businesses to attract investments, and put both the ‘open for business’ and ‘we’re hiring’ signs on their front doors.”

The bill has several Democratic co-sponsors. But other Democrats opposed the measure because they believed it would remove important investor protections.

Rep. Lacy Clay (D-Mo.) said that “the bill would make it much easier for fraudsters to swindle unsophisticated investors.”