Angel Insights Blog
Friday, September 12, 2014
Angel Capital Association Didn’t Take a Vacation in August—Promoted Public Policy During Congressional Recess
By: Chris McCannell, director of APCO Worldwide’s Washington DC financial service practice and government relations. He has over 15 years of Capitol Hill experience working for Members of Congress on the Financial Service Committee and the tax writing Ways and Means Committee. He and his colleagues have been ACA’s registered lobbyist for the past two and a half years. Chris is an active participant in ACA’s programming including national events like this week’s Leadership Workshop.
While Congress went back to their states and Congressional Districts for the month of August, members of the Angel Capital Association (ACA) took advantage of their Senators and Representatives being back home to engage on public policy issues important to angel investors and start up enterprises.
As the 113th Congress comes to an end, there are three top government relations priorities that ACA is promoting. First is a review by the Securities and Exchange Commission required under Dodd-Frank to review the definition of an individual accredited investor. Consumer advocates as well as state securities commissioners have promoted indexing the current definition to inflation which would limit the number of people who would be able to join angel groups and invest their money in start-up investments. Second is continuing rule making from the JOBS Act on what constitutes general solicitation. Bi-partisan legislation has been introduced in the House and Senate to exempt demo days from the general solicitation definition. Third and final is continued support for Section 1202 of the tax code which gives a 100% exemption of capital gains taxes to qualified investments in start-up businesses. This exemption expired at the end of 2013 and needs to be re-extended by Congress to affect investors in 2014.
On August 5th, Angel Capital Association along with angel investors throughout the United States joined Congressman Jared Polis (D-CO), Senator Jerry Moran (R-KS) and hundreds of other Chambers of Commerce, economic development authorities, start-up incubators and elected officials in recognizing Start-Up Day Across America. This initiative was established by the Congressional Caucus on Innovation and Entrepreneurship to encourage elected officials to meet with local entrepreneurs to learn about the challenges businesses face in starting a new company and to gain media awareness.
Later in the month, Mike Eckert, Chair of ACA’s public policy committee, coordinated a meeting of angel investors in Lafayette, Louisiana for Congressman Charles Boustany (R-LA) a senior member of the tax writing Ways and Means Committee. Congressman Boustany has been a strong friend to angel investors. He recently wrote a letter to the Securities and Exchange Commission opposing changes to the definition of qualified investor and highlighting the impact raising the income thresholds would have on job creation in southern Louisiana. At a roundtable discussion, Congressman Boustany learned about the concerns angel investors have with the JOBS Act and the definition of general solicitation as well as the importance of extending the 100 percent capital gains exemption for angel investments. Congressman Boustany was impressed by the number of local companies which received angel investing and went on to create jobs and committed to advocating for angel investors and ACA as a member of the Ways and Means Committee.
Members of the New Democrat Coalition visit Seattle based Modumetal to discuss start-up investing.
In South Carolina, ACA Board Member Matt Dunbar met with Senator Tim Scott’s (R-SC) Small Business Committee staff member to discuss angel investing, the definition of accredited investor and SEC rulemaking on JOBS Act. Last year, ACA’s public policy chair Mike Eckert testified before Senator Scott’s committee to promote JOBS Act rules which help encourage angel investing.
Ending the month, I was proud to work with former ACA board member Dan Rosen, to coordinate a meeting with five United States Representatives of the centrist, pro-business New Democrat Coalition to visit Seattle based Modumetal, a woman-led, angel funded company (by ACA member group Alliance of Angels). Led by Chairman of the New Dems Congressman Ron Kind (D-WI), along with Congresswoman Suzanne DelBene (D-WA), Congressman Adam Smith (D-WA), Congressman Derek Kilmer (D-WA) and Congressman Rick Larsen (D-WA), the five members of the delegation had a roundtable conversation about the challenges innovators face in raising capital and how Congress can help promote start-up job creators. Congressman Kind highlighted his work as a member of the Ways and Means Committee with angel investor advocate Congresswoman Lynn Jenkins (R-KS), to make the 100% capital gains deduction for angel investing a permanent part of the US Tax Code.
While most Americans were on vacation, August was a particularly busy month for ACA and our public policy agenda. Like politics itself, our advocacy and engagement never stops. Mid-term elections are happening in November, tax credits need to be extended by the end of the year, and in the next Congress new members will be joining the US House of Representatives and Senate, who will have to be educated on angel investing issues.
If you are interested in learning more about our public policy program feel free to email me at cmccannell@apcoworldwide.com
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