[Congressional Record (Bound Edition), Volume 157 (2011), Part 14]
[Senate]
[Page 19224]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              CROWDFUNDING

  Mr. MERKLEY. Mr. President, I rise today to address a promising new 
idea for investors and small businesses: crowdfunding.
  In recent years, small businesses and startup companies have 
struggled to raise capital. The traditional methods of raising capital 
have become increasingly out of reach for many startups and small 
businesses. There is another option, but Congress must act to authorize 
it and provide for appropriate safeguards.
  Low-dollar investments from ordinary Americans may help fill the 
void, providing a new avenue of funding to the small businesses that 
are the engine of job creation. The CROWDFUND Act would provide startup 
companies and other small businesses with a new way to raise capital 
from ordinary investors in a more transparent and regulated 
marketplace.
  The promise of crowdfunding is that investments in small amounts, 
made through transparent online forums, can allow the ``wisdom of the 
crowd'' to provide funding for small, innovative companies. It allows 
ordinary Americans to get in on the ground floor of the next big idea. 
It is American entrepreneurism at its best, which is why it has the 
support of the President and many in the business community.
  That said, there are real risks of investment losses at a rate far 
beyond ordinary investing. Crowdfunding, if done without proper 
oversight, provides significant opportunity for fraud. Indeed, it was 
not too long ago that our financial regulators were doing daily battle 
with scam artists pitching huge returns on fraudulent schemes through 
small, unregistered securities.
  That is why the CROWDFUND Act will tap the opportunity of 
crowdfunding while reducing the risks.
  The CROWDFUND Act provides a capital-raising alternative for startups 
and other small businesses, while not undercutting essential investor 
protections. It allows companies to raise up to $1 million each year 
from ordinary Americans. It provides more disclosure, more 
accountability and accuracy, and limits the exposure of any individual 
investor.
  I thank my colleague Senator Bennet for joining me in this effort, 
and I hope to partner with more of my colleagues to move this idea 
forward in the days to come.

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