The HALOS Act (HR 4498) or “Helping Angels Lead Our Startups Act” is a bill in the House of Representatives that seeks to fix a nagging issue for startups: You are not legally allowed to pitch your business to investors in public – unless you can prove everyone in attendance is an Accredited Investor.
Now the present definition of an Accredited Investor is a bit absurd. It defines an individual’s ability to invest in certain private placements based on the size of their bank account – not their ability or sophistication. Common sense dictates that net worth does not equal wisdom. There is another bill meandering through the legislative process that will attempt to address the shortcomings of this rule now. But the HALOs Act removes the onerous, and somewhat ridiculous, restriction to not allow public pitch events. Ironically, pitch events happen all the time at universities, incubators and accelerators around the country. Yes, these people are breaking federal law.
Investors will still be required to be Accredited. That is not going away (yet). Let’s see if the House can expedite this one and get it over to the Senate quickly.
See the bill, as it stands today, embedded below.
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