Proposed HALOS Act to Help Start-Up Companies Pitch Investors
A bipartisan group of lawmakers has proposed a measure that would exempt start-ups from the ban on open marketing. Introduced in the House of Representatives in February, the Helping Angels Lead our Startups (HALOS) Act seeks to amend Regulation D of the Securities Act of 1933 to ease general solicitation restrictions under specific circumstances. Per the HALOS Act, presentations would no longer be classified as general solicitation. This would give entrepreneurs the freedom to pitch investors at demo days and other events.
Events backed by colleges and universities, nonprofit organizations, angel investor or venture capital groups, or other sponsors specified by the Securities and Exchange Commission would be affected by the changes. Start-ups would not have the ability to provide specific offering information during pitches, and sponsors would not be allowed to make explicit investment recommendations.