Building on Success of JOBS Act, Ensure Startups Have Best Chance for Success on Public Markets Post-IPO
WASHINGTON, DC – The National Venture Capital Association (NVCA) today issued the following statement in support of efforts in the House of Representatives to identify solutions to support investment in innovative startup companies. At a congressional hearing today before the House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises, Chairman Scott Garrett (R-NJ) convened a hearing to review the 2012-passed Jumpstart Our Business Startups (JOBS Act) and discuss other ideas to encourage investment into high-growth startups.
“NVCA played a pivotal role in working with Congress and the Obama Administration to pass the JOBS Act in 2012 and we continue to work with regulators on implementation of the law in order to best accomplish the critical objectives of the legislation,” said Bobby Franklin, President and CEO of NVCA. “The JOBS Act was a great first step in reopening the public capital markets to innovative startups, but we can’t stop there. Over the last twenty years, we have gone from 300 IPOs a year and benefitting from 90 percent of global venture capital investment in U.S.-based companies, to 100 IPOs a year and attracting only 54 percent of global venture capital investment. We must continue to push the ball forward so that the American capital markets are effective once again in allowing groundbreaking startup companies to grow into the next titans of American business.”
“A central tenant of the JOBS Act was to pave the way for startup companies to on-ramp onto the public markets. The next step in the process is to ensure that these companies have the best chance for success post-IPO,” added Franklin. “Recent action by the Securities and Exchange Commission (SEC) to create a tick size pilot program for small- to mid-size capitalization companies was a great start. However, more needs to be done to ensure that small- and mid-size capitalization companies don’t become victims of liquidity crunch. We thank Chairman Garrett for calling this important hearing and pledge to work with him and his colleagues to best support a more favorable investment environment for startups.”