Scott’s Capital Markets Legislation Receives Broad Support
Washington, D.C. – Ranking Member Tim Scott’s (R-S.C.) recently introduced legislation to revitalize the businesses within our communities and open up our capital markets to all Americans, the Empowering Main Street in America Act, has received broad support from a wide-range of stakeholders.
Yesterday, Ranking Member Scott highlighted the legislation at a Punchbowl News event, explaining how the bill will improve access to capital for entrepreneurs across the country, tailor regulations for small and newly public companies looking to grow and expand their operations, and create new avenues for hardworking Americans to invest in their community.
The Ranking Member’s legislation, in part, is the result of feedback from his from his roundtable with Black investors and business founders discussing ways to improve minority communities’ access to capital. Here’s what the roundtable participants had to say on the bill:
“I thank Senator Tim Scott (R-SC) for his leadership in introducing the Empowering Main Street in America Act (EMSAA), which will significantly improve access to capital for all entrepreneurs and investors. I had the good fortune to participate in a roundtable that Senator Scott hosted in February with Black founders and investors, and I am very pleased to see many of the insights raised at that event reflected in the legislation. I launched RareBreed in response to the lack of access to capital for founders of color and founders outside the major investment hubs of Silicon Valley, New York, and Boston. Current rules price out many accredited investors, especially those of color, from participating in investment funds. This limits capital to drive innovation, economic growth, and job creation, and restricts capital invested in founders of color. We know this because research has shown that Black-led funds are four times as likely to invest in a Black-led company. The EMSAA will provide accredited investors of color more opportunities to participate in venture capital at lower minimums, helping to reduce risk, better diversify investments, and create wealth in communities of color. As someone who has spent my entire career in venture capital as an advocate for reducing barriers and expanding participation, I applaud this legislation and look forward to supporting its passage any way I can,” said McKeever “Mac” Conwell, Managing Partner, RareBreed Ventures.
“Entrepreneurs don’t need to be in Silicon Valley or Wall Street to deserve access to capital. To truly foster innovation and growth, we must meet entrepreneurs where they are—whether in rural communities, urban centers, or underserved areas. The Empowering Main Street in America Act will help ensure entrepreneurs, regardless of location, have the financial resources they need to launch and grow their business, driving local economies and building stronger communities nationwide,” said Herbert Drayton III, Managing Partner, HI Mark Capital.
"This legislative solution tears down barriers and fuels economic growth from the ground up. It's about ensuring that every American has the opportunity to build a business, invest, and achieve financial security. The message from our roundtable was clear: strengthen our capital markets, foster entrepreneurship, make financial literacy a priority, and create pathways to prosperity for all,” said Ryan Frazier, Managing Partner and CEO, Frazier Global.
Key industry stakeholders also voiced support for the legislation:
“The American Retirement Association commends Senator Scott for releasing this important legislative package that includes a provision that will expand access to lower cost investments in the retirement plans of governmental and nonprofit workers,” said Brian Graff, Chief Executive Officer, American Retirement Association.
“Carta supports the Empowering Main Street in America Act (EMSAA), which will expand access to capital, increase investment and ownership opportunities, and refine the regulatory framework to boost innovation and inclusion. By opening up private investments to a broader range of investors, this legislation will help level the playing field for underrepresented founders and fund managers and help drive capital to emerging markets. We believe these efforts are crucial to maintaining U.S. competitiveness, bolstering innovation, and creating new and expanded economic opportunities that allow startups and small businesses to thrive,” said Anthony Cimino, Head of Policy, Carta.
“Engine applauds the efforts of the Senate Banking Committee to expand access to capital for our nation’s startups and innovators especially for emerging ecosystems—who drive job creation across the country. The Empowering Mainstreet in America Act (EMSAA) also critically expands access to investment opportunities, including by expanding on-ramps to qualifying as an accredited investor, which will enable more diversity amongst startup funders, and in turn, greater diversity amongst startup founders receiving funding. The U.S. innovation ecosystem is core to the nation’s economy—making the startup ecosystem more accessible for founders and funders is critical to maintaining its strength,” said Kate Tummarello, Executive Director, Engine.
“Repeated research has demonstrated that new businesses – ‘startups’ – are disproportionately responsible for the innovations that drive productivity growth, economic growth, and virtually all net new job creation. But launching a new business requires money. Entrepreneurs need capital to pay expenses, develop their product or service idea, research the marketplace, develop and implement a strategy for identifying customers, and, hopefully, begin paying initial employees. Because such costs typically arrive long before the first dollar of revenue, capital and credit are the lifeblood of any new business. That’s why Senator Tim Scott’s (R-SC) Empowering Main Street in America Act (EMSAA) is so important. Each bill comprising the package will enhance entrepreneurs’ access to the capital they need to launch and build America’s next generation of businesses. Of particular importance, the legislative package will dramatically enhance access to capital for America’s women founders and entrepreneurs of color. The Center for American Entrepreneurship thanks Senator Scott for his leadership on this critical issue and looks forward to working with him and his Senate colleagues toward swiftly enacting the EMSAA,” said John R. Dearie, President, Center for American Entrepreneurship (CAE).
“The National Venture Capital Association (NVCA) applauds Ranking Member Scott for introducing the Empowering Main Street in America Act (EMSAA),” said Bobby Franklin, CEO, National Venture Capital Association. “NVCA has long supported the Developing and Empowering Our Aspiring Leader (DEAL) Act, included in the EMSAA, which would expand venture capital “qualifying” investments to include secondaries and fund-of-fund investments. This key provision would expand access to capital in emerging markets and address liquidity pressures facing many venture capitalists. Following the House’s bipartisan support of this provision earlier this year, we urge the Senate to work across the aisle to pass this important legislation.”
“ICI thanks Sen. Scott for his leadership, and hard work on necessary reforms to protect investors and increase capital formation in the US. In particular, this package includes two important pieces of legislation that will help all Americans working to secure their financial future. ICI would also like to thank Sen. Steve Daines for his work to include the Increasing Investor Opportunities Act in the package and to Sens. Britt, Warnock, Cassidy, and Peters for their previous work to introduce the Retirement Fairness for Charities and Educational Institutions Act. These bills passed the House on a bipartisan basis, and we hope the Senate will also act quickly to help investors,” said Eric Pan, President and CEO, Investment Company Institute (ICI).
The Angel Capital Association (ACA), Financial Technology Association (FTA), and Technology Councils of North America (TECNA) joined Carta, CAE, and Engine on a letter of support for the legislation, which reads, in part, “The undersigned organizations representing the U.S. innovation ecosystem support congressional efforts to drive economic growth, job creation, and opportunity that fuels American innovation. These efforts are even more important today, as startups and small businesses continue to face economic headwinds and global competition is increasing. The Empowering Main Street in America Act (EMSAA) provides a strong foundation to expand access to capital for entrepreneurs in emerging ecosystems, increase investment and ownership opportunities for more people, and improve the regulatory process to ensure policy encourages responsible innovation.”
In another letter of support, Tom Quaadman, Senior Vice President, U.S. Chamber of Commerce, said, “The U.S. Chamber of Commerce (‘Chamber’) supports S.5139, the ‘Empowering Main Street in America Act of 2024’ (‘EMSAA’). Your continued leadership on capital formation and governance issues is critical for the policies necessary to allow businesses to grow from small to large, empower investors, and increase the transparency and accountability of the Securities and Exchange Commission (‘SEC’). The Chamber welcomes this opportunity to work with you and all members of Congress on a bipartisan basis to advance these reforms at a critical juncture for the U.S. economy.”
Banking Committee members, including Senators Mike Crapo (R-Idaho), Mike Rounds (R-S.D.), Thom Tillis (R-N.C.), John Kennedy (R-La.), Bill Hagerty (R-Tenn.), Cynthia Lummis (R-Wyo.), Katie Britt (R-Ala.), Kevin Cramer (R-N.D.), and Steve Daines (R-Mont.) joined the Ranking Member on the legislation. Senator Jerry Moran (R-Kan.) is also a co-sponsor of the bill.
To view letters of support for individual pieces of legislation in Ranking Member Scott’s capital markets package, click here. For a section-by-section on the bill, click here.
###
Next Article Previous Article
