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27

Mar

2012

JOBS Act Passage: Why Now? PDF Print E-mail

Jennifer Dowling

Written by Jennifer Connell Dowling   
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Today Congress passed the JOBS Act which contained provisions to temporarily ease regulations for emerging growth companies that pursue an initial public offering. The bill now goes to President Obama who is expected to sign it, making it law – effectively immediately.

The passage is a victory for venture-backed companies who for a decade have struggled with not only unpredictable market volatility but also very predictable regulatory burdens which, in many cases, delayed or prevented an IPO from taking place. It is an issue that the NVCA has been raising for a decade as well.  

In 2005-2006, NVCA Board member Ted Schlein participated in the SEC Advisory Committee on Smaller Public Companies. That committee was formed to address the outcry from small companies struggling under the explosive costs of the new Sarbanes-Oxley mandate. After over a year of debate and examination, the committee ultimately made what became the first recommendation that scaled regulation be implemented. Unfortunately, those recommendations were never enacted, in large part because of the chorus of disapproval from the same groups (activist investors and labor unions) that most recently attacked the JOBS Act. In 2009, then NVCA Chairman Dixon Doll presented a Four Pillar Plan which sought to educate lawmakers and regulators about the continued difficulties for venture-backed companies trying to go public. In the midst of the financial meltdown gripping the country, those recommendations too were not acted upon. So the question today is – why now?

Fortunately for our companies and the U.S. economy, a confluence of forces made today's passage possible:

1) It's the economy. Statistics don't lie and the country continues to struggle with economic recovery. Job creation is top of mind for lawmakers, the Administration and the American public. Fact: Emerging growth companies that go public create jobs. Fact: The number of IPOs has fallen precipitously in the last decade. More IPOs means more U.S. jobs. While millions of jobs won't be created overnight, lawmakers recognized that, over the long term, easing the IPO process for fast growing companies can help reverse a trend that has sacrificed employment.

2) The IPO On-Ramp was a reasonable approach. The IPO On Ramp offered a reasonable approach to a significant problem. The IPO Task Force , which was led by former NVCA Board Chair Kate Mitchell and which included professionals from the capital markets ecosystem, made measured recommendations that served as the basis for the on-ramp provisions. It did not suggest a complete roll-back of important regulations. It requested a 5 year period of relief for companies after which time all existing regulations would still apply. Maintaining investor protections remained top of mind with the IPO Task Force and members of Congress, which was instrumental in garnering support for its passage.

3) Congress needed to demonstrate its value. Given the increased partisan rancor that has enveloped Congress – displayed painfully over the last several years throughout consideration of some of the nation's critical challenges - many Members of Congress were keen to champion a bipartisan bill that did not cost American taxpayers additional money but which would help stimulate the lackluster economy. Both Senators Schumer and Toomey – with support from Senators Crapo and Warner – along with Representatives Fincher and Carney – recognized the benefits of this legislation early on, and led the effort to move the bill through the Congress with both R's and D's attached to it.

4) Entrepreneurs weighed in. We can never underestimate the power of the entrepreneurial voice. Through the NVCA letter to the Senate signed by more than 700 company CEOs, CFOs and Founders to the AngelList that had thousands of supporters, the startup and venture capital communities let Congress know how important this bill was to the growth of their companies. Our legislators heard us loud and clear.

The NVCA would like to thank all of our members and supporters in this process, especially Kate Mitchell and the IPO Task Force for it thoughtfulness, commitment and work on the recommendations. It is a rare opportunity to be part of a process that sees a bill crafted, debated and passed in an expeditious and efficient manner. The JOBS Act will help emerging growth companies reach their potential and for that, we are so very proud to have played a part in its passage.

 

27

Mar

2012

Senators Introduce Bill to Get Treatments to Patients Faster PDF Print E-mail

Kelly Sloane

Written by Kelly Slone   
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The NVCA applauds Senators Bennet (D-CO), Hatch (R-UT) and Burr (R-NC) for introducing yesterday the Advancing Breakthrough Therapies for Patients Act aimed at bringing breakthrough treatments to patients more quickly.  This bi-partisan legislation expedites the FDA approval process for breakthrough therapies and increases clinical trial flexibility of drugs that show dramatic early responses without compromising drug safety and efficacy.  

NVCA has been working with Senators Bennet, Hatch, Burr and several other Members of Congress to develop legislative proposals that will provide more clarity and certainty in the FDA review process, especially for early-stage companies.  We believe the Breakthrough Therapies for Patients Act along with expanding the Accelerated Approval (AA) pathway for all promising new therapies in areas of unmet need will provide greater regulatory certainty and shorten drug development time.  These improvements will, in turn,  help open flow of critical investment in critical therapies for patients.  S. 2113, Transforming the Regulatory Environment to Accelerate Access to Treats (TREAT Act), sponsored by Senator Hagan (D-NC) and H.R. 4132, the Faster Access to Specialized Treatments Act (FAST Act), sponsored by Representatives Stearns (R-FL) and Towns (D-NY) would expand the AA pathway.    

We are hopeful that these bills will get attached to the Prescription Drug User Fee Reauthorization (PDUFA) bill currently being moved through Congress with a target reauthorization time frame of mid-summer 2012.

Stay tuned for updates on these legislative proposals for which NVCA is advocating to unlock the flow of investment into promising medical technologies.

 

22

Mar

2012

Senate Passes JOBS Act PDF Print E-mail

Mark Heesen

Written by Mark Heesen   
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We are extremely gratified by today’s bipartisan passage (73-26) of the JOBS Act and commend the U.S. Senate for its leadership – particularly Senators Schumer, Toomey, Crapo and Warner -- in crafting this legislation and expeditiously moving it forward.   The JOBS Act will address a multitude of challenges currently faced by America’s emerging growth companies that are seeking capital to grow, innovate and hire employees.   We are optimistic that the House will agree to send the JOBS Act to the President to sign in short order as this will be a significant victory for entrepreneurial companies and the U.S. economy.

 

21

Mar

2012

JOBS Act Passes Cloture Vote PDF Print E-mail

Jennifer Dowling

Written by Jennifer Connell Dowling   
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Moments ago the JOBS Act passed a cloture vote in the Senate (76-22) which means that the Senate has limited the amount of time for further debate and that the legislation will move towards a vote on final passage - most likely tomorrow. A strong cloture vote usually presages a strong vote for final passage.
We are not across the finish line yet but we crossed a significant threshold today. Thanks to all NVCA members and their companies for their continued support. Our collective voice has gotten us to this point and we hope to share some good news on final passage this week.
 

20

Mar

2012

JOBS Act Moving Through the Senate PDF Print E-mail

Jennifer Dowling

Written by Jennifer Connell Dowling   
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The last several days have been extremely busy as the House passed JOBS Act, which contains the IPO On-Ramp Provisions has moved to the Senate for consideration and a vote perhaps as early as today.  Whereas the bill passed the House in a strong bipartisan showing, the Senate appears to be less decisive and we have worked hard to demonstrate support for this important legislation.  Opponents have been weighing in, expressing concerns about investor protection and mischaracterizing the bill as rolling back much needed regulation.  Yet we stand firm in our position that the IPO On-Ramp was crafted specifically to preserve investor protections  - which is why the on-ramp is temporary.  We respond to some of these concerns in a more detailed JOBS Act Facts document here.  We encourage interested parties to review the facts.

Many constituencies have come forward in support of the JOBS Act and we would like to thank those who signed letters, wrote blogs, authored op-ed pieces and spoke with reporters and Senators about the importance of the legislation.  Your voices do indeed make a difference and our hope is that the President will have a bill to sign (which he has indicated he will) before month's end.

We are monitoring the Senate activity by the hour and will keep you informed here at NVCAccess on any developments.  On behalf of the NVCA we thank you all for your support.

 

11

Mar

2012

700+ Entrepreneurs Support Senate Action on IPO On Ramp Bill PDF Print E-mail

Jennifer Dowling

Written by Jennifer Connell Dowling   
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During a three day period last week, more than 700 CEOs, Founders and other executives at start-up companies across the United States signed a letter to Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell encouraging timely action on S. 1933, the IPO On-Ramp bill. This letter will be delivered to the Senate today, following last week's House of Representatives strong bipartisan passage of the JOBS Act (390-23) which contains the IPO On-Ramp provisions.

As President Obama has indicated his support of this legislation, it hopefully makes Senate passage of this bill simpler. It is only fitting that the Senate take S. 1933 across the finish line as it was under the bipartisan leadership of Senators Schumer, Toomey, Warner and Crapo that the bill was originally crafted. They have spent considerable time and deliberation on the merits of the proposals - and we are optimistic that the full Senate will pass S.1933 in the near term.  

The support from the start-up community in our letter signing campaign was swift and powerful, evidencing the need for a smoother path for emerging growth companies who seek to go public. These companies are the gazelles who, when accessing the capital markets system, create exponential growth in product development, operations and hiring. Easing the path to IPO will encourage more - and inhibit less - of these emerging growth companies to move forward and create tremendous economic value. 

We look forward to keeping you informed of developments here at NVCAccess.

 

07

Mar

2012

IPO On-Ramp Support Ramps Up PDF Print E-mail

Mark Heesen

Written by Mark Heesen   
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There is considerable action in Congress this week regarding the IPO On-Ramp legislation behind which NVCA has thrown its full support.  First, a full House of Representatives vote is anticipated this week for the Jumpstart our Business Startups (JOBS) Act which contains the on-ramp provisions originally contained in HR 3606.  Under the bipartisan House leadership of Representatives Stephen Fincher (R- TN) and John Carney (D-DE), support for this legislation has been strong and we are optimistic that the bill will pass decisively.  Stay tuned.

On the Senate side, where the legislative language was originally introduced by Senators Schumer (D-NY), Toomey (R-PA), Warner (D-VA) and Crapo (R-ID), hearings continue on a number of capital markets provisions including the on-ramp proposal.  Given the attention and momentum the bill has been garnering, this week the NVCA reached out to the VC and start-up community to demonstrate wide-spread support for moving the Senate bill -- S. 1933 -  to a vote and swift passage.  Hundreds of Founders, CEOs and CFOs of venture-backed start-ups have signed a letter of support which we intend to deliver to Senate leadership by week's end.  We have also seen support from the VC community in blogs including Ray Rothrock, Jason Mendelson, Brad Feld, Alex Taussig , Cathy Belk and others.  

Please keep the support coming.  We need to let Senators know how strongly we stand behind this legislation which will smooth the path to IPO for small emerging growth companies that have tremendous potential.  Passage of these bills and signature by the President will be not only a win for Congress - which has the opportunity to demonstrate a bipartisan effort to support the capital markets system and promote economic growth -- but it will certainly support promising venture-backed companies who today find the IPO process more challenging that it needs to be.

Want to know more about the IPO On-Ramp?  A Q and A document on the legislation can be found here.  We will keep you informed of developments here at NVCAccess - so check back daily!

 
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