Bill Overview
Title: Expanding American Entrepreneurship Act
Description: This bill revises qualification requirements for venture capital funds. Venture capital funds are exempt from certain regulations applicable to other investment firms, including those related to filings, audits, and restricted communications with investors. Currently, an investment firm qualifies as a venture capital fund if, among other requirements (1) the fund's securities are owned by 250 persons or less, and (2) the fund has $10 million or less in aggregate capital contributions and uncalled committed capital. The bill increases these amounts to 500 persons and $50 million, respectively.
Sponsors: Sen. Moran, Jerry [R-KS]
Target Audience
Population: Individuals involved in or benefiting from venture capital funds
Estimated Size: 5000000
- Venture capital funds are targeted by the bill as it modifies their qualification criteria.
- An increase in the number and capital threshold will allow more funds to qualify as 'venture capital' under the law.
- Investors in venture capital funds will be affected as the expanded criteria may allow more investments opportunities.
- Entrepreneurs who will seek funding from these venture capital funds are indirectly affected, especially those in start-ups.
- The bill may impact financial professionals managing these funds as they need to adapt to the regulatory changes e.g., less stringent rules on reporting and audits for more funds.
- Entrepreneurship in the U.S. may be boosted by increased access to venture capital funds.
Reasoning
- The policy primarily affects venture capitalists, entrepreneurs, and financial professionals. As such, we should include representatives from these groups in the simulated interviews.
- There's a budget constraint, so the impact may not be evenly distributed, especially in the first few years as the system adjusts.
- The bill is designed to increase access to venture capital, which could spur entrepreneurship and innovation, potentially impacting wellbeing positively over time.
- Not everyone in the system will notice an impact; some groups, like non-entrepreneurs or those not involved in venture capital, will see no direct change.
Simulated Interviews
Venture Capitalist (New York, NY)
Age: 45 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- The new limits allow us to increase our fund size and attract more significant investments.
- We anticipate being able to fund more entrepreneurs and improve our returns.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 9 | 7 |
Start-up Founder (San Francisco, CA)
Age: 34 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 12/20
Statement of Opinion:
- Increased access to venture capital could make it easier to secure critical early funding.
- This change could accelerate our growth trajectory and expand market reach.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 7 | 6 |
Financial Analyst (Austin, TX)
Age: 29 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 10/20
Statement of Opinion:
- Our firm might be able to engage with more venture capital funds due to relaxed restrictions.
- Increased deal flow could improve job security and career prospects.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 5 |
Entrepreneur (Chicago, IL)
Age: 50 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 2.0 years
Commonness: 15/20
Statement of Opinion:
- I see potential for more innovation and start-up growth due to this policy.
- However, the policy might benefit newer start-ups more than existing ones.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Regulatory Compliance Officer (Boston, MA)
Age: 55 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 1.0 years
Commonness: 14/20
Statement of Opinion:
- Less regulatory burden can lead to more risk in investments, which concerns me.
- It might encourage more VC activity, but safeguarding investors is crucial.
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 |
Tech Startup Employee (Denver, CO)
Age: 40 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 11/20
Statement of Opinion:
- More VC opportunities could mean improved funding scenarios for us.
- It makes our future opportunities slightly more optimistic.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 6 |
Independent Investor (Seattle, WA)
Age: 38 | Gender: other
Wellbeing Before Policy: 7
Duration of Impact: 6.0 years
Commonness: 9/20
Statement of Opinion:
- This policy expands my options for where to place investment dollars.
- The increased thresholds allow me to diversify and spread risks.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 8 | 7 |
Freelance Software Developer (Miami, FL)
Age: 28 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 4.0 years
Commonness: 16/20
Statement of Opinion:
- I might find more work opportunities due to increased venture capital activity.
- Working with more startups funded by VCs could be beneficial.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 5 |
University Professor (Los Angeles, CA)
Age: 49 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 18/20
Statement of Opinion:
- This provides a fascinating case study for changes in entrepreneurship dynamics.
- The effects on start-up success rates and venture funding rates would be critical to study.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Retired Banker (Raleigh, NC)
Age: 62 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 19/20
Statement of Opinion:
- This bill likely adds more dynamics to the venture capital landscape.
- I see potential positive effects on new business formations and job creation.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Cost Estimates
Year 1: $1500000 (Low: $1000000, High: $2000000)
Year 2: $1500000 (Low: $1000000, High: $2000000)
Year 3: $1500000 (Low: $1000000, High: $2000000)
Year 5: $1500000 (Low: $1000000, High: $2000000)
Year 10: $1500000 (Low: $1000000, High: $2000000)
Year 100: $1500000 (Low: $1000000, High: $2000000)
Key Considerations
- The expanded qualification criteria could lead to a notable increase in venture capital activity, supporting more start-ups.
- Potential regulatory impact due to the increased number of funds needing minimal oversight but larger overall investment volumes may affect financial markets.
- Consider potential risks of reduced regulatory scrutiny, affecting investors' confidence.