U.S. Senator Mike Rounds introduced legislation on Mar. 19 aimed at increasing access to capital for small businesses and entrepreneurs by updating federal securities regulations.
The Small Business Investor Capital Access Act seeks to modernize the threshold that determines when private fund advisers must register with the U.S. Securities and Exchange Commission (SEC), allowing more small private funds to invest in emerging businesses. The current exemption, set by the Dodd-Frank Act in 2010, applies to advisers managing up to $150 million in assets; the new bill would raise this limit to $175 million and require adjustments for inflation every five years.
“Small businesses are the backbone of our economy, but too often they struggle to access the capital needed to expand and create jobs,” said Rounds. “This legislation removes unnecessary regulatory barriers that prevent small investment funds from directing capital to innovative startups and entrepreneurs, particularly in rural communities like many across South Dakota.”
Senator Ruben Gallego joined Rounds in introducing the bill. “For too many small business owners, securing financing is still the hardest part of getting a business off the ground — and the problem runs deepest in communities that traditional lenders have long overlooked. Small investment funds can fill that gap, but right now they are forced to spend time and money following the same expensive compliance rules as massive Wall Street firms. That mismatch means these small funds have less capital to put towards startups and small businesses,” said Gallego. “This bill modernizes an outdated $150 million threshold and ties it to inflation so smaller funds can direct resources toward supporting local job-creating investments.”
Brett Palmer, President of the Small Business Investor Alliance (SBIA), also commented on the proposal: “The Small Business Investor Alliance (SBIA) applauds the introduction of the Small Business Investor Capital Access Act by Senator Mike Rounds and Senator Gallego. This is a smart and necessary modernization of outdated regulation. Their strong support underscores the importance of aligning regulatory thresholds with economic reality. This bill will reduce compliance costs for smaller funds and allow more capital to flow to America’s small businesses.”
According to the official website, Rounds grew up in Huron, South Dakota as the eldest of 11 children, has four children and 11 grandchildren, earned a bachelor’s degree in political science from South Dakota State University, served two terms as governor before joining the Senate, built a successful business career, and serves on several Senate committees including Appropriations, Armed Services, Banking, Housing and Urban Affairs, Indian Affairs, and Intelligence.
Companion legislation has been introduced in the House by Representatives Barr and Velázquez. The measure passed through committee with bipartisan support last July before being included in broader financial reform legislation approved by a wide margin later that year.
