H.R.3352 - Helping Angels Lead Our Startups Act of 2025; HALOS Act of 2025 (119th Congress)
Summary
H.R.3352, the HALOS Act of 2025, directs the Securities and Exchange Commission (SEC) to revise Regulation D to ease restrictions on general solicitation or advertising for certain events where issuers present investment opportunities. This revision aims to facilitate capital formation for early-stage companies by allowing them to communicate with potential investors at events sponsored by various organizations without violating general solicitation prohibitions. The Act outlines specific criteria for these events, including sponsor qualifications and limitations on information shared.
Expected Effects
The HALOS Act is likely to increase access to capital for startups by allowing them to present at a wider range of events without fear of violating SEC regulations on general solicitation. This could lead to more investment in early-stage companies. It may also broaden the pool of potential investors who are exposed to these opportunities.
Potential Benefits 4/5
- Increased Capital Access: Startups gain easier access to funding through presentations at sponsored events.
- Wider Investor Pool: More investors, including accredited individuals, can learn about investment opportunities.
- Economic Growth: Facilitating investment in early-stage companies can stimulate innovation and job creation.
- Clarity for Issuers: Provides clearer guidelines for what constitutes permissible communication at events.
- Support for Entrepreneurship: Encourages the formation and growth of new businesses.
Potential Disadvantages
- Increased Risk for Investors: Loosening solicitation rules could expose investors to riskier investment opportunities.
- Potential for Fraud: A greater number of offerings might increase the opportunity for fraudulent schemes.
- Compliance Costs: Issuers and sponsors must adhere to specific event criteria, potentially increasing compliance costs.
- Uneven Playing Field: Companies that can access these events may have an advantage over those that cannot.
- Limited Investor Protection: The one-page disclosure may not be sufficient to fully inform investors of the risks involved.
Constitutional Alignment 4/5
The HALOS Act appears to align with the spirit of promoting economic activity, which indirectly relates to the general welfare clause of the Constitution's preamble. It does not directly infringe upon any specific constitutional right or enumerated power. The regulation of securities falls under the Commerce Clause, granting Congress the power to regulate interstate commerce, which includes the sale of securities.
Impact Assessment: Things You Care About
This action has been evaluated across 19 key areas that matter to citizens. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).