Bill Overview
Title: Increasing Opportunities for Retail Investors Act
Description: This bill expands the exemptions from registration requirements applicable to companies offering or selling securities. In general, the Securities and Exchange Commission (SEC) prohibits the offering or selling of securities unless the offering is registered with the SEC or it qualifies for an exemption. Specifically, the bill increases the annual offering limit applicable to the crowdfunding exemption from $1 million to $5 million. The bill also allows the SEC to increase through rulemaking the dollar threshold or limit applicable to other types of offerings, including offerings for small- and medium-sized companies. Additionally, the bill increases the offering limit applicable to small securities offerings and provides for adjustments to this limit in line with inflation.
Sponsors: Sen. Rounds, Mike [R-SD]
Target Audience
Population: Retail investors involving in crowdfunded and small securities offerings
Estimated Size: 30000000
- Retail investors will have more investment opportunities due to increased offering limits.
- Small and medium-sized companies might expand their fundraising activities, benefiting from the relaxed regulations.
- The bill impacts the regulation and oversight activities of the SEC, changing them due to broader exemptions.
Reasoning
- Retail investors will gain new opportunities as companies can now raise more funds through crowdfunding, potentially leading to higher returns on investments.
- Small and medium-sized enterprises (SMEs) will have easier access to capital, leading to potential business growth and economic stimulation.
- Changes in SEC oversight may introduce additional risks or complexity for investors, affecting their confidence and behavior.
Simulated Interviews
Software Engineer (Austin, TX)
Age: 30 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 20.0 years
Commonness: 10/20
Statement of Opinion:
- I enjoy investing in new startups and the increased limit will allow me to explore more options.
- This increase in opportunities could mean higher returns for me if I choose wisely.
- I worry slightly about the increased risk if oversight is reduced, but overall I see it as a positive change.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 9 | 7 |
Small Business Owner (New York, NY)
Age: 45 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 20.0 years
Commonness: 7/20
Statement of Opinion:
- This bill could be a game-changer for my business, enabling us to seek more capital and grow quicker.
- The expanded limits make it more feasible for us to aim for larger funding rounds without the burdensome registration process.
- I am concerned about investor expectations raising as well.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 8 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 9 | 5 |
| Year 20 | 9 | 5 |
Retired Banker (Chicago, IL)
Age: 60 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- I'm skeptical about crowdfunding but do see the potential for diversified investment options.
- This policy could make it easier for uninformed investors to lose money, which concerns me regarding broader market stability.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Entrepreneur (San Francisco, CA)
Age: 28 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 15.0 years
Commonness: 5/20
Statement of Opinion:
- This expansion increases our ability to access crucial seed and growth funding without the initial registration hassles.
- It's a boon for startups like ours that are exploring innovative frontiers.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 9 | 6 |
| Year 5 | 9 | 6 |
| Year 10 | 9 | 6 |
| Year 20 | 8 | 6 |
Freelance Writer (Portland, OR)
Age: 35 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 9/20
Statement of Opinion:
- I like the idea of having more projects and companies to choose from.
- I hope this encourages more community-oriented projects to appear.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 6 |
Financial Advisor (Miami, FL)
Age: 50 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 15.0 years
Commonness: 12/20
Statement of Opinion:
- This could offer my clients more diversified investment options, though they need to be wary of risks.
- Balancing potential high returns with increased risk exposure is crucial.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Marketing Director (Atlanta, GA)
Age: 41 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 6/20
Statement of Opinion:
- Excited about new investment opportunities that align with my values.
- Feel confident about investing in projects that have a proven commitment to sustainability.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 9 | 7 |
Restaurant Owner (Seattle, WA)
Age: 55 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- The policy might ease some regulatory pressures we face when we try to seek additional funding.
- Opens up more avenues for capital if we pivot to an investor model in future expansions.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 7 | 5 |
App Developer (Los Angeles, CA)
Age: 26 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 7.0 years
Commonness: 11/20
Statement of Opinion:
- Glad to have more offerings to consider for developing new apps.
- Wonder if this will drive more competition within my project interests' space, making it harder to stand out.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 8 | 5 |
Retired Teacher (Boston, MA)
Age: 62 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 15/20
Statement of Opinion:
- While I'm not directly affected, my concerns lie with my grandchildren's potential financial ventures.
- This kind of policy requires careful monitoring to protect uninformed younger investors.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Cost Estimates
Year 1: $5000000 (Low: $3000000, High: $7000000)
Year 2: $4500000 (Low: $2500000, High: $6500000)
Year 3: $4000000 (Low: $2000000, High: $6000000)
Year 5: $3500000 (Low: $1500000, High: $5500000)
Year 10: $3000000 (Low: $1000000, High: $5000000)
Year 100: $1500000 (Low: $500000, High: $2500000)
Key Considerations
- Potential risks for retail investors due to relaxed regulations need to be assessed and mitigated.
- There may be unintended market disruptions or abuse if oversight measures are insufficient.
- The effectiveness of increased offering limits depends on how well small and medium-sized companies can attract new investments.