NEWCASTLE, ME – U.S. Senator Angus King announced today that he and a group of bipartisan colleagues have reintroduced the Helping Angels Lead Our Startups (HALOS) Act. This legislation would remove burdensome restrictions from individuals looking to invest in startups, allowing those startups to get the capital needed to grow their business and create jobs.

“Through startups, our entrepreneurs and innovators push the envelope and build on bold ideas, helping propel our economy forward. But too often they have a tough time getting off the ground because burdensome regulations stymie development,” said King. “By fixing flawed federal rules, the HALOS Act will remove an unnecessary roadblock and help startups grow and thrive.”

Startups often showcase their business model at conferences known as “demo days” to secure investments and grow their businesses. Valuable startup investors, such as “angel investors,” attend these conferences. An estimated 90 percent of outside equity used to help grow these young businesses comes from angel investors.

Unfortunately, new Securities and Exchange Commission (SEC) regulations, initiated by the 2012 JOBS Act, have discouraged angel investors from participating in demo days. These regulations put the investors at risk of being forced to turn over extensive personal financial details as part of an onerous third-party vetting process. Viewed as an invasion of privacy, this process deters many investors from supporting startups at a critical time in their development.

The HALOS Act would lift this regulation, reverting back to the same investor vetting process that angel investors have been using at demo days for years. Removing these restrictions and protecting investors from an invasion of privacy will enable startups to continue to get the investments they need to grow and create new jobs. In 2010, companies in their first year created an average of 3 million jobs.

Senators Chris Murphy (D-Conn.) and John Thune (R-S.D.) reintroduced the bill yesterday. Along with Senator King, additional original cosponsors include Pat Toomey (R-Penn.) and Brian Schatz (D-Hawaii).

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