A bipartisan pair of US senators introduced legislation that would ease a key compliance cost for early-stage companies raising money online, lifting the point at which small businesses must pay for an independent accountant review when using securities crowdfunding.
Similar legislation in the House has been rolled into the Incentivizing New Ventures and Economic Strength Through Capital Formation (INVEST) Act (HR 3383). This legislation has already been approved in the House and is now in the Senate Banking Committee.
The proposal, dubbed the Amendment for Crowdfunding Capital Enhancement and Small-business Support Act (the ACCESS Act, was introduced by Republican Dave McCormick of Pennsylvania and Democrat Andy Kim of New Jersey, who said existing rules impose disproportionate costs on the smallest offerings.
Senator Kim said that too often small businesses face red tape and obstacles to capital that is a critical tool to their success.
“By modernizing outdated ‘one-size-fits-all’ requirements, we open doors for businesses and investors of all sizes and backgrounds to grow, while still looking after the overall stability and strength of our financial markets.”
Under the crowdfunding exemption created under the 2012 JOBS Act and implemented through Regulation Crowdfunding (Reg CF) in 2016, issuers above a low fundraising threshold must provide financial statements reviewed by an independent public accountant.
The statutory trigger is $100,000, while SEC guidance reflects an inflation-adjusted level of $124,000.
The senators’ bill would raise the threshold for that review requirement to $250,000. It would also allow the Securities and Exchange Commission to lift the threshold further, up to $400,000, if recommended by relevant SEC advisory offices.
Many investment crowdfunding insiders have been calling for the change outlined in the bill.
Supporters say the change would help startups that use crowdfunding to test demand and reach first customers, particularly founders who struggle to qualify for bank loans or attract venture capital.
McCormick said crowdfunding can be especially useful for entrepreneurs in Pennsylvania, while Kim said the bill would reduce “one-size-fits-all” red tape without weakening investor safeguards.
The sponsors cited industry figures showing that since Reg CF took effect, more than 6,500 businesses have raised nearly $2.4 billion across about 8,400 rounds.
They also pointed to Pennsylvania’s ranking among the top U.S. states by number of crowdfunding issuers.
Raising the threshold could make sub-$250,000 raises more viable by reducing fixed costs that bite hardest at the seed stage, potentially increasing deal flow on regulated crowdfunding portals.
Investor-protection groups may still scrutinize the move, but the bill preserves higher-touch oversight for larger offerings and leaves the SEC room to recalibrate the bar as fraud risks and market practices evolve.