As we highlighted in a recent post on Google’s Policy by the Numbers blog, entrepreneurs need access to capital to make grow their ideas into successful companies. We are excited to see members of Congress working to promote entrepreneurs’ efforts to build new companies and create new jobs.
Last week, the House of Representatives passed the Jumpstart Our Business Startups (JOBS) Act with nearly full bipartisan support. The JOBS Act makes it easier for startups to raise capital. The crowdfunding provisions drafted by Congressman Patrick McHenry and Majority Leader Eric Cantor are particularly exciting and we applaud the House for its focus on helping to promote innovation and economic growth.
Crowdfunding means raising small amounts of money from a large crowd. Already, thousands of new companies have been funded by crowdfunding platforms like Kiva, Kickstarter, and IndieGogo. With the growth of social networks and other online platforms, crowdfunding is a promising investment model that would allow more Americans to invest in a new company simply by using the Internet to connect with entrepreneurs.
Earlier this week senators from both sides of the aisle -- Senators Merkley, Brown, Bennet, and Landrieu -- introduced the Capital Raising Online While Deterring Fraud and Unethical Non-Disclosure Act of 2011, known as the CROWDFUND Act. President Obama has also expressed support for signing into law crowdfunding legislation.
Google was started by two graduate students in a garage with a check from one (trusting) investor. The next Google, Facebook, Apple, or Amazon could be funded thanks to crowdfunding legislation, and that would be a great thing for our economy.