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January 25th, 2023
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AOIP Advocates for Enhanced Capital Formation and Investment Opportunities for SMEs
Capital Markets Advocacy | Aug 9, 2023
The Association of Online Investment Platforms (AOIP) has formally addressed Congress by sending a letter to Congressman Patrick McHenry, emphasizing the significance of the Jumpstart our Business Startups Act of 2023.
AOIP, an advocacy group in the United States, champions the cause of both private firms seeking growth capital and smaller investors aiming for private market access. The group acknowledges the positive impact of the JOBS Act since 2012 but expresses concerns over potential regulatory challenges that may hinder capital access for a broader audience.
See: Fintech Fridays EP57: 10 Years of Investment Crowdfunding: Past, Present & Future Since the JOBS Act
Who are the AOIP?
The Association of Online Investment Platforms (AOIP) is an advocacy group with a mandate that revolves around fostering a conducive environment for online investments, supporting SMEs, and ensuring that regulatory frameworks are balanced to promote growth while safeguarding investor interests. The names listed on the letter include:
- Maxwell R. Rich: President of AOIP and also holds positions as Deputy General Counsel, VP of Regulatory Affairs, and Secretary at Republic.
- Bill Clark: CEO/Founder of MicroVentures.
- Ryan Feit: Co-Founder of SeedInvest.
- Kendrick Nguyen: CEO/Co-Founder of Republic.
- Rebecca Kacaba: Dealmaker.
- Giovanni Corrado: Associated with Republic.
See: Improving the Regulatory Environment for Entrepreneurial Capital Formation: JOBS Act 4.0
Takeaways from AOIPs Letter
- Concerns Over Regulatory Challenges: AOIP acknowledges the positive strides made since the inception of the JOBS Act in 2012. However, they express growing concerns about potential regulatory challenges that might hinder broader access to capital and investment opportunities, especially for small businesses.
- Emphasis on SMEs' Importance and Challenges: The letter underscores the surge in entrepreneurship, with a notable increase in new business applications. Highlighting data from the U.S. Chamber of Commerce, AOIP points out the surge in entrepreneurship, with over 5.4 million new business applications in 2021. Despite this, small businesses face declining access to growth capital. The SEC Small Business Capital Formation Advisory Committee has voiced concerns over the challenges faced by small firms and stresses the SEC's pivotal role in fostering a conducive environment for investors.
- Endorsement of Legislative Initiatives: AOIP endorses several legislative initiatives from the House Financial Services Committee. These initiatives aim to expand the definition of "accredited investor," promote public offerings, and address other areas to improve access to capital for businesses and investment opportunities for smaller investors.
These takeaways encapsulate AOIP's advocacy for a balanced regulatory environment that supports the growth of small businesses and ensures broader access to investment opportunities.
See: JOBS Act 4.0: Association of Online Investment Platforms Sends Letter to Congress
President of the AOIP, Maxwell Rich:
“Now, more than ever, Congress must take due consideration to JOBS Act 4.0 and push it forward. A decade post JOBS Act of 2012, many of its promises for small businesses and mainstream investors are in sight and the risks and concerns of this novel legislation, originally voiced by its detractors, are unrealized. Small and emerging businesses are in need of routes to capital beyond what is currently authorized by law; venture capital funding to new and emerging companies is down over 50% and interest rates are at historic highs. Congress has the power to help, and the AOIP strongly supports the bills enumerated in its most recent letter and its members are available to the legislative, executive and third-parties who may need counseling on their potential benefits to the American economy and investors of all walks of life.”
View the full letter --> here
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