Bill Overview
Title: Helping Startups Continue to Grow Act of 2022
Description: This bill allows certain issuers of securities regulated as emerging growth companies to continue operating under such regulations, including those related to reduced disclosures and other exemptions, for an additional five years.
Sponsors: Sen. Scott, Tim [R-SC]
Target Audience
Population: People employed by or economically dependent on startups
Estimated Size: 7000000
- Emerging growth companies are defined as small to mid-size companies with annual gross revenues of less than $1.07 billion during their most recent fiscal year, as per the JOBS Act of 2012.
- These companies benefit from reduced regulatory requirements, primarily to encourage capital formation among smaller firms.
- A significant portion of these companies within the U.S. and globally are startups or are in their growth phase.
- The legislation aims to extend the period these companies can operate under relaxed regulations, impacting their operational costs and compliance burdens.
- Startups drive innovation and job creation, and legislation that reduces their regulatory burden can accelerate these positive impacts.
- According to statistics from organizations like the World Bank and GEM, there are millions of startups globally, with several hundreds of thousands in the U.S. alone.
Reasoning
- The policy targets emerging growth companies, which often include various startups in the U.S. that are in their earlier stages of development.
- The focus on reduced regulations and disclosures can be crucial for startups, offering them more flexibility and potentially lowering costs.
- The estimated number of people employed by or economically dependent on affected startups is substantial, in the millions, as startups are a major driver of employment and economic activity.
- Populating the interviews with varied demographics will help capture differentiated impacts: some may benefit directly while others indirectly, or not at all.
- Given the limited budget and large target population, not every startup or individual connected to startups will feel significant changes, but those who do might experience reduced stress and increased opportunities for growth.
- People who are directly employed by or are founders of these companies are more likely to see a moderate to high impact.
- Consideration must be made for geographic differences as certain regions might have a denser concentration of startups (e.g., Silicon Valley, New York) compared to others.
Simulated Interviews
Startup Founder (San Francisco, CA)
Age: 29 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- This policy would relieve some of the regulatory burdens, allowing me to focus more on scaling the business rather than navigating complex regulations.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 9 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 8 | 6 |
Software Engineer (Austin, TX)
Age: 34 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- The policy will allow my company to operate more flexibly, which could lead to job security and growth opportunities for us employees.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 6 |
Venture Capitalist (Palo Alto, CA)
Age: 52 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 2.0 years
Commonness: 3/20
Statement of Opinion:
- This legislation might make the startup ecosystem more attractive for investments, ensuring better returns and less administrative overhead.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Business Consultant (Boston, MA)
Age: 45 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 4.0 years
Commonness: 4/20
Statement of Opinion:
- If companies feel less regulatory pressure, they may seek more strategic consulting services to leverage their resources and growth opportunities.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Marketing Specialist (New York, NY)
Age: 26 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 7/20
Statement of Opinion:
- There could be increased opportunities for growth as our startup can now allocate resources more effectively with fewer regulatory constraints.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Small Business Owner (Denver, CO)
Age: 39 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 1.0 years
Commonness: 6/20
Statement of Opinion:
- I'm unsure how this policy will directly affect companies like mine, but a wider net for startups could foster a stronger economic environment.
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 | 5 | 5 |
| Year 20 | 5 | 5 |
Accountant (Miami, FL)
Age: 47 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 8/20
Statement of Opinion:
- Fewer regulations might simplify the work for accountants like me, but it depends on how companies redeploy those savings.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 5 |
Freelance Developer (Seattle, WA)
Age: 31 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 4.0 years
Commonness: 9/20
Statement of Opinion:
- The policy could lead to an increase in contracting opportunities with growing startups having more resources.
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 | 7 | 6 |
| Year 20 | 7 | 5 |
University Professor (Chicago, IL)
Age: 63 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 2/20
Statement of Opinion:
- This policy is a topic of interest. The effects on startup growth and sustainability will make for insightful research and case studies.
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 | 7 |
| Year 20 | 7 | 7 |
Retired (Atlanta, GA)
Age: 58 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 2.0 years
Commonness: 4/20
Statement of Opinion:
- Policies that make the business environment favorable can potentially increase returns on my investments, although the impact may be gradual.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Cost Estimates
Year 1: $5000000 (Low: $3000000, High: $7000000)
Year 2: $5000000 (Low: $3000000, High: $7000000)
Year 3: $5000000 (Low: $3000000, High: $7000000)
Year 5: $5000000 (Low: $3000000, High: $7000000)
Year 10: $0 (Low: $0, High: $0)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- Ensuring that the prolonged exemptions do not lead to unchecked financial practices or reduced investor protections.
- Evaluating the eventual transition of companies out of emerging growth company status to avoid cliff effects or regulatory shocks.
- Monitoring the indirect fiscal impacts, such as potential adjustments in investor confidence or market dynamics.