Memphis Standard

WASHINGTON, D.C. — Congressman David Kustoff (R-TN) today introduced the Small Business Investment Act of 2023 in the House of Representatives. This legislation will make it easier for small businesses to access the financing they need to grow and succeed in today’s economy.

Senator John Cornyn (R-TX) introduced the companion bill in the United States Senate.

"The Small Business Investment Act will unleash American innovation and entrepreneurship by giving small businesses the tools they need to grow, innovate, and create jobs," said Congressman Kustoff. 

"Small businesses are crucial to the strength of our economy and they deserve the support they need to continue to grow and employ hardworking Americans."

“Small businesses play a critical role in our economy, and it’s imperative they have the financial freedom and flexibility to succeed,” said Sen. Cornyn. “By expanding financing options, this bill would make it easier for startups and small businesses to grow, hire employees, and benefit the communities in which they operate.”

“Rep. Kustoff’s bill will drive the much-needed capital formation from early stage investors across the country that is needed to keep entrepreneurs moving forward with the innovative ideas and companies that will continue to drive economic growth for years to come," said Patrick Gouhin, Chief Executive Officer, Angel Capital Association. 

Background:

Section 1202 of the federal tax code, also known as the Qualified Small Business Stock (QSBS) Gain Exclusion, allows Americans to invest in certain startup businesses tax free. This helps new businesses attract investors and raise the funds they need to survive and grow. Since it was enacted in 1993, Section 1202 has been an effective tool for incentivizing domestic investment and spurring job creation, innovation, and entrepreneurship. Building upon this important provision, and making it easier for small businesses to utilize, will grow our economy and help keep America the innovation capitol of the world. 

The Small Business Investment Act will expand IRC Section 1202 eligibility to more businesses, make it easier and cheaper for businesses to raise capital, and give businesses more flexibility in their financing options.

The bill was endorsed by the Advanced Medical Technology Association, Americans for Tax Reform (ATR), Angel Capital Association, Biotechnology Innovation Organization, Carta, Center for American Entrepreneurship, Engine, Financial Technology Association, National Venture Capital Association, US Chamber Center for Capital Markets Competitiveness, QSBS Expert, S Corporation Association, Small Business & Entrepreneurship Council, and the Small Business Investor Alliance.

Click here to read the full text of the bill. 

Original source can be found here.