The INVEST Act was recently approved by the US House of Representatives and is now in the Senate, where it will be considered to become law. The bill incorporates multiple policy changes that help smaller businesses, as well as improve opportunities for smaller investors.
The bill captured significant bipartisan support, with 87 Democrats voting for it and all Republicans voting in favor. At the same time, a good number of Democrats (123) voted no.
Perhaps the most significant change is the democratization of the definition of an Accredited Investor. Currently, this rule discriminates and disenfranchises smaller investors’ access to many private securities offerings. The bill’s current language creates a path for individuals who do not meet the current wealth threshold to participate in this critical market.
In advance of the vote, the Small Business and Entrepreneurship Council (SBE Council) sent a letter to House leaders in support of the bill. Below is a portion of the letter that outlines essential aspects of the bill that provides “a balanced and thoughtful legislative package.”
The INVEST Act is timely, as SBE Council’s October 2025 Small Business Check Up Survey found that 51% of small business owners reported that limited access to capital is restricting their ability to invest, grow, effectively compete, and operate at their ideal capacity. The INVEST Act advances practical solutions and reforms – measures long supported by SBE Council – that address their capital needs.
The INVEST Act increases the crowdfunding threshold, requiring a costly accountant review. The increase – from $100,000 to $250,000, with discretion up to $400,000 – reduces a significant burden for startups seeking modest early financing. The update will allow more small businesses to pursue regulated crowdfunding by making the option more efficient and less costly.
The INVEST Act sensibly and responsibly modernizes accredited investor eligibility, which means entrepreneurs will have a wider pool of capital to tap into beyond wealthy investors.
The INVEST Act provides clarity and reassurance for startups during demo days and related pitch events. Specifically, that they are in compliance with rules when they participate in these important events that provide exposure and recognition for their startups.
The INVEST Act enhances the capital channels that supply financing to small businesses. Raising the exemption threshold for smaller investment advisers helps preserve the regional and specialized investors who often provide early support to entrepreneurs.
The INVEST Act broadens the flow of professionally managed capital into private markets and improves the Emerging Growth Company framework, making it easier for growing businesses to access financing as they scale. The bill also expands the pool of investors who can participate in private offerings, which increases the number of potential backers available to entrepreneurs seeking early financing. Additionally, the legislation permits the submission of confidential draft registration statements and “testing the waters” with potential investors. This will allow companies to receive feedback from investors, and help to determine interest before committing to a public filing
The INVEST Act aims to improve the regulatory environment by establishing Offices of Small Business within key divisions at the SEC, updating the definition of small entity, and requiring future rules to account for small business impacts, which will ensure that regulatory decisions better reflect the potential impact on small firms. Moreover, the bill directs resources to study the challenges and barriers for small businesses that seek to go public.
