WASHINGTON, D.C. – Today, Congressman Tom Emmer (MN-06) re-introduced the Main Street Growth Act to create more jobs, improve capital formation, and encourage more Initial Public Offerings (IPOs). The bipartisan bill is co-led by Jimmy Panetta (CA-19).
The Main Street Growth Act allows the U.S. Securities and Exchange Commission to provide for the creation of venture exchanges, which will foster an active and liquid secondary trading environment for small and emerging growth companies to access the capital they need to grow. These exchanges will encourage more early-stage IPOs, which, in turn, will enable retail investors to invest in early-stage, high-growth companies potentially previously restricted to accredited investors.
"When businesses go public, jobs are created and new centers of wealth are formed. However, IPOs are on a steep decline, which means more exciting investment opportunities are reserved for accredited investors instead of everyday Americans. Recognizing the continued challenges we face in courting new IPOs, and, understanding that liquidity is key for small companies interested in going public as well as securities currently trading in the marketplace, it is clear that we must take steps to better tailor our markets in order to account for the varying size and nature of potential public companies if we are to encourage new capital formation. I look forward to working with my colleagues to support the success of our nation’s entrepreneurs and capital markets," Emmer said.
“California’s 19th Congressional District is home to many transformative small businesses that too often find access to existing capital markets limited,” said Rep. Panetta. “The bipartisan Main Street Growth Act would empower the federal government to create specialized venture exchanges, critical to getting the capital these fledgling businesses need to grow and thrive. Small businesses are the backbone of our economy and essential to fostering the future innovation we’ll need to stay ahead, and I’ll continue working to ensure they have a strong foundation for success.”
While American capital markets saw a historic rise in Initial Public Offerings (IPOs) in 2020 and 2021, participation in the IPO process has slowed dramatically over the last few decades. The number of IPOs declined significantly from the 1990s to the 2000s and remained relatively flat throughout the 2010s. Additionally, the number of small IPOs (under $100 million) has declined significantly.
The Main Street Growth Act builds on the success of the 2012 JOBS Act, which allowed businesses greater access to crowdfunding and expanded the number of companies that can offer stock without going through burdensome SEC registration. Specifically, the Main Street Growth Act allows for the creation of venture exchanges, which are markets that are designed specifically to support the trading of small and emerging growth companies as well as currently listed, but liquidity-challenged securities.
The Main Street Growth Act received unanimous support from the House Financial Services Committee and passed the House of Representatives during the 115th Congress with no opposition. You can read the full text of the Main Street Growth Act here.