[House Report 119-123]
[From the U.S. Government Publishing Office]
119th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 119-123
======================================================================
HELPING ANGELS LEAD OUR STARTUPS ACT OF 2025
_______
June 3, 2025.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Hill of Arkansas, from the Committee on Financial Services,
submitted the following
R E P O R T
[To accompany H.R. 3352]
The Committee on Financial Services, to whom was referred
the bill (H.R. 3352) to require the Securities and Exchange
Commission to revise rules relating to general solicitation or
general advertising to allow for presentations or other
communication made by or on behalf of an issuer at certain
events, and for other purposes, having considered the same,
reports favorably thereon with an amendment and recommends that
the bill as amended do pass.
CONTENTS
Page
Purpose and Summary.............................................. 3
Background and Need for Legislation.............................. 3
Committee Consideration.......................................... 3
Related Hearings................................................. 5
Committee Votes.................................................. 6
Committee Oversight Findings..................................... 8
Performance Goals and Objectives................................. 8
Committee Cost Estimate.......................................... 8
New Budget Authority and CBO Cost Estimate....................... 8
Unfunded Mandates Statement...................................... 8
Earmark Statement................................................ 8
Federal Advisory Committee Act Statement......................... 8
Applicability to the Legislative Branch.......................... 8
Duplication of Federal Programs.................................. 9
Section-by-Section Analysis of the Legislation................... 9
Changes in Existing Law Made by the Bill, as Reported............ 10
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Helping Angels Lead Our Startups Act
of 2025'' or the ``HALOS Act of 2025''.
SEC. 2. CLARIFICATION OF GENERAL SOLICITATION.
(a) Definitions.--For purposes of this section and the revision of
rules required under this section:
(1) Angel investor group.--The term ``angel investor group''
means any group that--
(A) is composed of accredited investors interested in
investing personal capital in early-stage companies;
(B) holds regular meetings and has defined processes
and procedures for making investment decisions, either
individually or among the membership of the group as a
whole; and
(C) is neither associated nor affiliated with
brokers, dealers, or investment advisers.
(2) Issuer.--The term ``issuer'' means an issuer that is a
business, is not in bankruptcy or receivership, is not an
investment company, and is not a blank check, blind pool, or
shell company.
(b) In General.--Not later than 6 months after the date of enactment
of this Act, the Securities and Exchange Commission shall revise
Regulation D (17 CFR 230.500 et seq.) to require that in carrying out
the prohibition against general solicitation or general advertising
contained in section 230.502(c) of title 17, Code of Federal
Regulations, the prohibition shall not apply to a presentation or other
communication made by or on behalf of an issuer which is made at an
event--
(1) sponsored by--
(A) the United States or any territory thereof, the
District of Columbia, any State, a federally recognized
Indian Tribe, a political subdivision of any State,
territory, or federally recognized Indian Tribe, or any
agency or public instrumentality of any of the
foregoing;
(B) a college, university, or other institution of
higher education;
(C) a nonprofit organization;
(D) an angel investor group;
(E) an incubator or accelerator;
(F) a venture forum, venture capital association, or
trade association, other than an association created
solely for the purpose of sponsoring an event described
under this subsection; or
(G) any other group, person, or entity as the
Securities and Exchange Commission may determine by
rule;
(2) that is not held in any facility that is owned or
operated by a religious organization, other than an institution
of higher education that is accredited and operated primarily
for post-secondary education;
(3) where any advertising for the event does not reference
any specific offering of securities by the issuer;
(4) the sponsor of which--
(A) does not make investment recommendations or
provide investment advice to event attendees;
(B) does not engage in an active role in any
investment negotiations between the issuer and
investors attending the event;
(C) does not charge event attendees any fees other
than reasonable administrative fees;
(D) does not receive any compensation for making
introductions between investors attending the event and
issuers, or for investment negotiations between such
parties;
(E) makes readily available to attendees a disclosure
not longer than one page in length, as prescribed by
the Securities and Exchange Commission, describing the
nature of the event and the risks of investing in the
issuers presenting at the event; and
(F) does not receive any compensation with respect to
such event that would require registration of the
sponsor as a broker or a dealer under the Securities
Exchange Act of 1934, or as an investment advisor under
the Investment Advisers Act of 1940; and
(5) where no specific information regarding an offering of
securities by the issuer is communicated or distributed by or
on behalf of the issuer, other than--
(A) that the issuer is in the process of offering
securities or planning to offer securities;
(B) the type and amount of securities being offered;
(C) the amount of securities being offered that have
already been subscribed for; and
(D) the intended use of proceeds of the offering.
(c) Rule of Construction.--Subsection (b) may only be construed as
requiring the Securities and Exchange Commission to amend the
requirements of Regulation D with respect to presentations and
communications, and not with respect to purchases or sales.
(d) No Pre-existing Substantive Relationship by Reason of Event.--
Attendance at an event described under subsection (b) shall not
qualify, by itself, as establishing a pre-existing substantive
relationship between an issuer and a purchaser, for purposes of Rule
506(b).
PURPOSE AND SUMMARY
H.R. 3352, the Helping Angels Lead Our Startups (HALOS) Act
of 2025, was introduced on May 13, 2025, by Representative Mike
Lawler (NY-17). H.R. 3352 defines an angel investor for
purposes of the federal securities laws. The bill also
clarifies the definition of general solicitation contained in
the Securities Act of 1933 to ensure that startups can discuss
their products and business plans at certain events, known as
``demo days,'' without such discussions being considered an
investment offering.
BACKGROUND AND NEED FOR LEGISLATION
Depending on the regulatory pathway a company chooses to
raise capital, the company may be limited in how it can connect
with potential investors. For example, the most commonly used
offering exemption under the federal securities laws--Rule
506(b) of Regulation D--prohibits the use of ``general
solicitation'' to market securities. A solicitation that
conditions the market for an offering of securities is viewed
as general solicitation. Examples of activities that amount to
a general solicitation include newspaper and magazine
advertisements, unrestricted public websites, and TV and radio
broadcasts.
In implementing the Jumpstart Our Business Startups (JOBS)
Act, the Securities and Exchange Commission (SEC) classified
``demo day'' communications (i.e., communications made in
connection with an event sponsored by a group or entity that
invites issuers to present their businesses to potential
investors with the aim of securing investment) as a general
solicitation.\1\ However, the SEC reversed course when it
finalized Rule 148. Under the new rule, an issuer will not be
deemed to have engaged in general solicitation if the
communications are made in connection with an event sponsored
by a college, university, or other institution of higher
education; a state or local government or instrumentality
thereof; a nonprofit organization; or an angel investor group,
incubator, or accelerator, provided certain conditions are
satisfied. These conditions include limitations on the
sponsor's activities, a requirement that the advertising for
the event not reference any specific offering of securities by
the issuer, and limits on the information conveyed at the event
regarding the offering of securities by or on behalf of the
issuer. H.R. 3352 codifies this SEC position to ensure issuers
may continue to conduct demo days without violating the
securities laws.
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\1\Jumpstart Our Business Startups Act, Pub. L. 112-106, 126 Stat.
306 (2012).
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COMMITTEE CONSIDERATION
114TH CONGRESS
On February 9, 2016, Representative Steve Chabot (R-OH)
introduced H.R. 4498, the Helping Angels Lead Our Startups Act,
with Representatives Kyrsten Sinema (D-AZ), Robert Hurt (R-VA),
and Mark Takai (D-HI) as original cosponsors. Representatives
Carlos Curbelo (R-FL), Ann Wagner (R-MO), Ryan Costello (R-PA),
Andy Barr (R-KY), Randy Hultgren (R-IL), John Delaney (D-MD),
Pete Sessions (R-TX), Jared Polis (D-CO) were added
subsequently as cosponsors. This bill is an earlier iteration
of H.R. 3352. The bill was referred solely to the Committee on
Financial Services. The Subcommittee on Capital Markets and
Government Sponsored Enterprises of the Committee on Financial
Services held a hearing to examine matters related to H.R. 4498
on December 2, 2015. On March 2, 2016, the Committee on
Financial Services ordered H.R. 4498 to be favorably reported
to the House of Representatives by a vote of 44-13. On April
27, 2016, the House passed the bill by a recorded vote of 325-
89. It was received in the Senate and referred to the Committee
on Banking, Housing, and Urban Affairs.
115TH CONGRESS
On January 3, 2017, Representative Chabot introduced H.R.
79, the Helping Angels Lead Our Startups Act, with
Representative Sinema as an original cosponsor. Representatives
Sessions, Hultgren, Curbelo, Wagner, Barr, Delaney, Polis,
Costello, Brad Schneider (D-IL), Scott Peters (D-CA), Amata
Coleman Radewagen (R-AS), Bill Posey (R-FL), Roger Williams (R-
TX), and Stephen Knight (R-CA) were added subsequently as
cosponsors. This bill is an earlier iteration of H.R. 3352. The
bill was referred solely to the Committee on Financial
Services. On January 10, 2017, the House passed the bill by a
recorded vote of 344-73. It was received in the Senate and
referred to the Committee on Banking, Housing, and Urban
Affairs.
116TH CONGRESS
On March 27, 2019, Representative Chabot introduced H.R.
1909, the Helping Angels Lead Our Startups Act of 2019, with
Representative Schneider as an original cosponsor.
Representatives Radewagen and Daniel Meuser (R-PA) were added
subsequently as cosponsors. This bill is an earlier iteration
of H.R. 3352. The bill was referred solely to the Committee on
Financial Services. In addition, Senator Chris Murphy (D-CT)
introduced S. 1063, a companion bill to H.R. 1909, with
Senators Patrick Toomey (R-PA), Brian Schatz (D-HI), Thom
Tillis (R-NC), Kyrsten Sinema (D-AZ), and John Thune (D-SD) as
original cosponsors.
117TH CONGRESS
On December 7, 2022, Representative Ted Budd (R-NC)
introduced H.R. 9451, the Helping Angels Lead Our Startups Act
of 2022. This bill is an earlier iteration of H.R. 3352. This
bill was referred solely to the Committee on Financial
Services.
118TH CONGRESS
On March 10, 2023, Representative Mike Lawler (R-NY)
introduced H.R. 1553, the Helping Angels Lead Our Startups Act
of 2023, with Representative Josh Gottheimer (D-NJ) as an
original cosponsor. Representative Wiley Nickel (D-NC) was
added subsequently as a cosponsor. This bill is an earlier
iteration of H.R. 3352. This bill was referred solely to the
Committee on Financial Services. The Subcommittee on Capital
Markets of the Committee on Financial Services held a hearing
on February 8, 2023, titled ``Empowering Entrepreneurs:
Removing Barriers to Capital Access for Small Businesses.'' On
May 24, 2023, the Committee on Financial Services ordered H.R.
1553 to be favorably reported to the House of Representatives
by a vote of 35-12. On March 7, 2024, H.R. 1553 was added to
H.R. 2799, the Expanding Access to Capital Act of 2023. On
March 8, 2024, the House passed H.R. 2799 by a recorded vote of
212 yeas and 205 nays. It was received in the Senate and
referred to the Committee on Banking, Housing, and Urban
Affairs. In addition, Senator Murphy introduced S. 3298, a
companion bill to H.R. 155, with Senators Sinema and Tillis as
original cosponsors.
119TH CONGRESS
On May 13, 2025, Representative Lawler introduced H.R.
3352, the Helping Angels Lead Our Startups Act of 2025, with
Representative Gottheimer as an original cosponsor.
Representative Maria Salazar (R-FL) was added subsequently as a
cosponsor. The bill was referred solely to the Committee on
Financial Services. The bill was attached to the February 26,
2025, hearing titled ``The Future of American Capital:
Strengthening Public and Private Markets by Increasing Investor
Access and Facilitating Capital formation'' and the March 25,
2025 hearing titled, ``Beyond Silicon Valley: Expanding Access
to Capital Across America.''
On May 20, 2025, the Committee met in open session to
consider, among others, H.R. 3352. The Committee ordered H.R.
3352, as amended, to be reported favorably to the House of
Representatives.
RELATED HEARINGS
Pursuant to clause 3(c)(6) of rule XIII of the Rules of the
House of Representatives, the following hearings were used to
develop H.R. 3352:
The Capital Markets Subcommittee of the Committee on
Financial Services held a February 26, 2025, hearing titled
``The Future of American Capital: Strengthening Public and
Private Markets by Increasing Investor Access and Facilitating
Capital Formation'' and the Full Committee held a March 25,
2025, hearing titled, ``Beyond Silicon Valley: Expanding Access
to Capital Across America.'' A discussion draft version of the
bill was attached to both hearings. The following witnesses
testified at the February 26, 2025, hearing: Mr. Andrew
Barnell, CEO and Co-Founder, Geneoscopy; Mr. McKeever Conwell,
Founder and Managing Partner, RareBreed Ventures; Ms. Rebecca
Kacaba, CEO and Co-Founder, DealMaker; Ms. Anna Pinedo,
Partner, Mayer Brown; and Ms. Alexandra Thornton, Senior
Director, Financial Regulation, Center for American Progress.
The following witnesses testified at the March 25, 2025,
hearing: Mr. Steve Case, Chairman and CEO, Revolution LLC; Mr.
Bill Newell, Senior Business Advisor & Former CEO, Sutro
Biopharma; Ms. Candice Matthews Brackeen, General Partner,
Lightship Capital; Mr. Joel Trotter, Partner, Latham & Watkins
LLP; and Ms. Amanda Senn, Director of the Alabama Securities
Commission.
COMMITTEE VOTES
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee Report to include for
each record vote on a motion to report the measure or matter
and on any amendments offered to the measure or matter the
total number of votes for and against and the names of the
Members voting for and against.
On May 20, 2025, the Committee ordered H.R. 3352, as
amended, to be reported favorably to the House by a recorded
vote of 50 yeas and 1 nay, a quorum being present. (Record Vote
No. FC-113).
Before the question to report was called, the Committee
adopted an amendment in the nature of a substitute, designated
LAWLER_054, which clarifies the definition of an issuer and
requires event sponsors to make readily available to attendees
a one page disclosure that describes the nature of the event
and the risks of investing in the issuers presenting at the
event, offered by Representative Lawler. The amendment was
adopted by voice vote, a quorum being present.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
COMMITTEE OVERSIGHT FINDINGS
Pursuant to clause 3(c) of rule XIII of the Rules of the
House of Representatives, the findings and recommendations of
the Committee, based on oversight activities under clause
2(b)(1) of rule X of the Rules of the House of Representatives,
are incorporated in the descriptive portions of this report.
PERFORMANCE GOALS AND OBJECTIVES
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the goal of H.R. 3352 is to provide a
definition for an angel investor for purposes of the federal
securities laws.
COMMITTEE COST ESTIMATE
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison of the
costs that would be incurred in carrying out H.R. 3352. The
Committee has requested but not received a cost estimate from
the Director of the Congressional Budget Office. However,
pursuant to clause 3(d)(1) of rule XIII, the Committee will
adopt as its own the cost estimate by the Director of the
Congressional Budget Office once it has been prepared.
NEW BUDGET AUTHORITY AND CBO COST ESTIMATE
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause 3(c)(3) of rule XIII and section 402
of the Congressional Budget Act of 1974, a cost estimate was
not made available to the Committee in time for the filing of
this report. The Chairman of the Committee shall cause such
estimate to be printed in the Congressional Record upon its
receipt by the Committee.
UNFUNDED MANDATES STATEMENT
The Committee has requested but not received from the
Director of the Congressional Budget Office an estimate of the
Federal mandates pursuant to section 423 of the Unfunded
Mandates Reform Act. The Committee will adopt the estimate once
it has been prepared by the Director.
EARMARK STATEMENT
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the resolution and states that the provisions
of the bill do not contain any congressional earmarks, limited
tax benefits, or limited tariff benefits within the meaning of
the rule.
FEDERAL ADVISORY COMMITTEE ACT STATEMENT
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
APPLICABILITY TO THE LEGISLATIVE BRANCH
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
DUPLICATION OF FEDERAL PROGRAMS
Pursuant to clause 3(c)(5) of rule XIII of the Rules of the
House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes a program of
the Federal Government known to be duplicative of another
Federal program, including any program that was included in a
report to Congress pursuant to section 21 of the Public Law
111-139 or the most recent Catalog of Federal Domestic
Assistance.
SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION
Section 1. Short title
This section cites H.R. 3352 as the ``Helping Angels Lead
Our Startups Act of 2025'' or the ``HALOS Act of 2025.''
Section 2. Clarification of general solicitation
This section defines an angel investor group as any group
that is composed of accredited investors interested in
investing personal capital in early-stage companies that hold
regular meetings and have defined processes and procedures for
making investment decisions and who are neither associated nor
affiliated with brokers, dealers, or investment advisors. This
section also defines an issuer as a business that is not in
bankruptcy or receivership, is not an investment company, and
is not a blank check, blind pool, or shell company.
In addition, this section directs the SEC to revise
Regulation D of its rules to require that in carrying out the
prohibition against general solicitation or general advertising
that the prohibition shall not apply to a presentation or other
communications made by or on behalf of an issuer which is made
at an event sponsored by: (1) the U.S. or any territory
thereof, (2) a college, university, or other institution of
higher education, (3) a nonprofit organization, (4) an angel
investor group, (5) an incubator or accelerator, (6) a venture
forum, venture capital association, or trade association, or
(7) any other group, person, or entity as the SEC may determine
by rule.
This section also notes that the prohibition shall not
apply where any advertising for the event does not reference
any specific offering by the issuer or where the sponsor of
which does not make an investment recommendation or provide
investment advice, does not engage in an active role in
investment negotiation, does not charge event attendees any
fees other than reasonable administrative fees, does not
receive any compensation for making introductions between
investors and issuers, does not receive any compensation with
respect to such event, and makes readily available to attendees
a disclosure not longer than one page describing the nature of
the event and the risks of investing in the issuers presenting
at the event.
Moreover, this section clarifies that the prohibition shall
not apply where no specific information regarding an offering
of securities by the issuer is communicated or distributed by
or on behalf of the issuer, other than the issuer being in the
process of offering securities or planning to offer securities,
the type and amount of securities being offered, the amount of
securities being offered that have already been subscribed for,
and the intended use of proceeds of the offering.
This section also covers virtual events where online
participation is limited to individuals associated with the
sponsor organization, individuals that the sponsor reasonably
believes are accredited investors, or individuals who have been
invited to the event by the sponsor based on industry
experience.
CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
H.R. 3352 does not repeal or amend any section of a
statute. Therefore, the Office of Legislative Counsel did not
prepare the report required under clause 3(e) of rule XIII of
the Rules of the House of Representatives.
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