Helping Angels Lead Our Startups Act of 2025; HALOS Act of 2025
Summary
The HALOS Act of 2025 aims to revise SEC rules regarding general solicitation and advertising, specifically to allow presentations by issuers at certain events without violating prohibitions on general solicitation. This bill seeks to clarify regulations around angel investor groups and the types of events where issuers can communicate about potential securities offerings. The goal is to facilitate capital formation for early-stage companies by providing more avenues for them to connect with potential investors.
Expected Effects
The HALOS Act, if enacted, would lead to a revision of SEC Regulation D, sections 230.500 through 230.508. This revision would create exceptions to the prohibition on general solicitation for presentations made at events sponsored by various entities, including government bodies, educational institutions, non-profits, and angel investor groups. The changes are intended to make it easier for startups to raise capital.
Potential Benefits
- Increased Access to Capital: Startups can more easily connect with potential investors.
- Reduced Regulatory Burden: Clarifies rules around general solicitation, potentially lowering compliance costs.
- Economic Growth: Facilitates investment in early-stage companies, fostering innovation and job creation.
- Support for Angel Investor Groups: Recognizes and supports the role of angel investor groups in early-stage funding.
- Wider Range of Events: Allows presentations at events sponsored by diverse entities, expanding opportunities for issuers.
Most Benefited Areas:
Potential Disadvantages
- Potential for Investor Risk: Loosening solicitation rules could increase the risk for less sophisticated investors.
- Compliance Complexity: While intended to simplify, the specific requirements for events could introduce new compliance challenges.
- Limited Scope: The act focuses narrowly on presentations at specific events, potentially overlooking other forms of general solicitation.
- Enforcement Challenges: The SEC may face challenges in monitoring and enforcing the new regulations, ensuring compliance with event requirements.
- Unintended Consequences: The changes could lead to unintended loopholes or abuses that undermine investor protection.
Constitutional Alignment
The HALOS Act appears to align with the constitutional principles related to promoting general welfare and facilitating economic activity. Congress's power to regulate commerce, as outlined in Article I, Section 8, includes the authority to regulate securities and establish rules for capital formation. The First Amendment protects freedom of speech, and while securities regulations can limit certain types of commercial speech to protect investors, this act aims to strike a balance by allowing presentations at sponsored events under specific conditions.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).