Two pieces of legislation of particular interest to the startup community continue to wind their way through Congress: Senator Lugar and Kerry’s Startup Visa Act and Senator Dodd’s Financial Reform bill. We’ve written about both here before. Sponsor Restoring American Financial Stability Act The Restoring American Financial Stability Act passed the US Senate on May 20 and now heads to conference committee to reconcile the differences between the House and the Senate versions. The investor and startup community have long been concerned about the contents of Senator Dodd’s financial reform bill, as it would erect several barriers to funding by changing the requirements for investor and business registration. In the final Senate version, some of the parts most troubling to investors and startups were removed from the bill, including the provision that would require 120-day waiting period for state regulators to review any investment deal. The new income and net worth requirements for angel investors are still in place, but these will not increase with inflation. The SEC will review accredited investors every four years. An amendment to the bill was accepted, expressly aimed to protect angel investment. Liddy Karter, chairman of the AngelCapital Association (ACA) said in a press release , the amendment “ensures that entrepreneurs will more easily be able to raise angel capital and more accredited investors can continue making the angel investments they love to make.” Startup Visa Act Senator Kerry and Lugar’s Startup Visa Act is also in committee. Introduced in February, the Startup Visa Act will help foreign-born entrepreneurs secure visas. The proposed legislation will change the current requirements that now says investors from other countries must have $1 million in capital in order to get a visa to start a business in the US. The Startup Visa Act, supported by a number of investors, includingEric Ries, Dave McClure, Shervin Pishevar, Brad Feld, Paul Kedrosky, Manu Kumar, & Fred Wilson, proposed that non-US born entrepreneurs could get a visa as long as they had funding from a US investor. Although the bill is in committee, Dave McClure did have an impromptu meeting with Secretary of State Hilary Clinton, urging her support for the legislation. Her staff, reports McClure, will follow up. As research shows, young high-growth businesses generate a substantial number of new jobs, an argument that startups and investors will be sure to make as legislators debate the outcome of these two important bills. Discuss

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In the recent months, entrepreneurship has been a hot topic in Washington. From the proposed Startup Visa , to Senator Dodd’s financial reform strategies and even to the overall need for more job creation – many agree that entrepreneurship will play a large role in turning this country’s economic woes around. But one group in support of entrepreneurship is asking for something a little different from the President: a national holiday. Sponsor Siamak Taghaddos, co-founder of Grasshopper , a virtual phone system built for entrepreneurs, proposed this morning that March 20th, 2011 should be the first annual National Entrepreneurs’ Day in honor of all the good that has come to the nation through entrepreneurship. After all, this nation was build by entrepreneurs who took a risk on a crazy venture called America, so why shouldn’t entrepreneurs have their own day? The purpose of having a day for entrepreneurship isn’t only to honor and remember the great entrepreneurs of our past, but to also band together in support for improving the future of the country’s forward thinkers. Taghaddos believes a day to honor the achievements of the nation’s entrepreneurs could serve to drive the country back toward economic prosperity. “Entrepreneurs are America’s real ‘bailout’ in the sense that by investing in them and their ventures, we would stimulate a real economic turnaround,” writes Taghaddos. “Whether or not you agree with the politics, entrepreneurship is a vital part of any economic stimulus.” Supporters can cast their vote by visiting EntrepreneursDay.org and signing a petition aimed at President Obama by logging in with their Twitter account. Do keep in mind, however, that doing so will automatically tweet your support out on your account, but that’s a small price to pay to help raise entrepreneurial awareness. Many notable entrepreneurs have already signing the petition, including Wordpress founder Matt Mullenweg, Jason Fried of 37Signals , video blogger Andrew Warner of Mixergy and Babak Nivi of Venture Hacks . Also included on the list of supporters is former New Hampshire Governor Craig Benson, and Babson College President Leanard Schlesinger. Much like the Startup Visa movement, this petition for a national holiday seems like a no-brainer for fans of entrepreneurship. Why should we want to spread information and resources to as many people as possible? Why shouldn’t we recognize entrepreneurs for their achievements on a national stage? If you can find a discernible downside to this, please let us know about it in the comments below. Otherwise, go sign the petition and help entrepreneurs get the national recognition they deserve. Discuss

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In the wake of the financial meltdown, a new set of financial regulations proposed by Senator Christopher Dodd aimed at plugging the “too big to fail” loopholes could have some negative side effects for the angel investment community. According to a report from the Seattle-based site TechFlash , Dodd’s bill would require that angel investments be approved by the SEC, a process that could take as many as 120 days to complete. Sponsor But that’s just the tip of the iceberg. The enormous reform bill (some 1300+ pages) also gives the SEC the ability to delegate regulatory authority to state governments on investments it deems too small in size or scope. Angel investors themselves could be place under the regulatory microscope as well; the bill wants to raise the income level it takes to become an accredited investor, perhaps even doubling the requirement. Not only would this bill make the process of attaining seed-stage funding more difficult, more expensive, and more time consuming, it goes against the government’s goal to create jobs in America. If these regulations become law, fewer startups will get funding because they won’t want to deal with the lengthy SEC filing process. Instead, more innovative ideas will go by the wayside, startups will not get funding, and jobs will not be created. Furthermore, by raising the requirements to provide angel funding, the pool of investors will shrink, which will only exacerbate the problems facing the nation’s already floundering venture capital industry that is only recently seeing signs of recovery . In a letter sent to Senator Dodd earlier this month, Mark Heesen, President of the National Venture Capital Association, and Marianne Hudson, Executive Director of the Angel Capital Association, together outlined their grievances with the bill and its danger towards the VC industry. “Venture capitalists often invest in companies that were supported by angels, so ensuring that regulations for accredited investors do not harm this capital source is important,” said Heesen and Hudson. “In addition, as more and more venture capital firms co-invest with angel investors and angel organizations, the state preemption of securities regulations could extend to a large number of businesses, from start-ups to others that need capital for growth.” What do you think of this bill? It seems to me the sections mentioned above will be in direct conflict with the Startup Visa movement which most of the startup community seems to be on board with . The distinction seems obviously clear: encouraging foreign entrepreneurs to start their companies in America will create jobs, and this new bill from Senator Dodd will prevent the creation of jobs by thinning out angel investments. Let us know your thoughts below in the comments. Discuss

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Foreign startups with their sights set on targeting a U.S. market will be happy to note that as of this morning, Senator John Kerry and Senator Richard Lugar introduced the Startup Visa Act in Washington . In late December we covered the details of the legislation as well as comments from some of the act proponents including YCombinator’s Paul Graham and Foundry Group’s Brad Feld. As of today, additional supporters include investors Reid Hoffman, Fred Wilson and Dave McClure. The support has us wondering if there is any real opposition to this act? Sponsor According to the Startup Visa site , the legislation has received the support of over 100 U.S. venture capitalists and angel investors. Supporters believe that the act modifying the existing EB-5 Visa will drive U.S. job creation and will allow foreign entrepreneurs to secure visas in the case where they’ve already established investment from a sponsoring US investor. Investment levels are $250,000 in funding from a venture capital firm or $100,000 secured from an angel. The startup must also have plans to create five new jobs every two years, raise at least $1 million dollars every two years, or generate at least $1 million dollars in revenue. In other words, within a two year time frame, a startup entrepreneur needs to either scale up the operation and staff it, prove the product to the point of raising Series A, or generate substantial profit. Nevertheless, there has been some opposition as a few ask the question, “Why should we let those foreigners gobble up our resources?” As a foreigner I’m obviously not completely impartial in covering this story; however, some of the arguments against this act seem akin to those used against immigration in general. In this case it appears that the U.S. is purposely welcoming those who’ve been vouched for by American investors, put on a strict product timeline and given a mandate to hire Americans and pay American taxes. Apart from U.S.-based xenophobia am I missing the point of the opposition here? Is there a valid justification as to why this isn’t a good piece of legislation for the U.S. or startup world? Let us know your thoughts in the comments below. Photo Credit: Startupvisa Discuss

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