Incentivizing New Ventures and Economic Strength Through Capital Formation Act of 2025

Bill Number: H.R. 3383
Origin Chamber: House
Congress: 119th Congress, Session 1
Policy Area: Finance and Financial Sector
Status: Passed House
Latest Action: 2025-12-15: Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
Last Updated: 2026-03-18T19:37:48Z

AI-Generated Summary

Purpose

The INVEST Act of 2025 aims to promote economic growth by making it easier for small businesses, startups, and emerging companies to access capital. It reduces regulatory hurdles in securities laws, expands funding options like crowdfunding and venture capital, and enhances investor participation while maintaining basic protections. The act focuses on supporting rural and underrepresented entrepreneurs, broadening investor access, and streamlining public market entry.

Key Provisions

The act is divided into three titles, amending laws like the Securities Act of 1933, Securities Exchange Act of 1934, Investment Company Act of 1940, and Investment Advisers Act of 1940.

Title I: Expanding Access to Capital for Small Businesses

Rural Business Support (Sec. 101): Adds rural-area small businesses to exemptions for women-owned and minority-owned businesses under the Securities Exchange Act, allowing easier access to certain regulatory relief.
Angel Investor Events (Sec. 102): Revises Regulation D to permit issuers (non-bankrupt early-stage companies) to present at events sponsored by governments, universities, nonprofits, angel groups, or incubators without triggering "general solicitation" bans. Events must disclose risks, avoid investment advice, and limit specifics shared. Attendance alone does not create a "pre-existing relationship" for sales rules.
Crowdfunding Enhancements (Sec. 103): Raises individual investment limits in crowdfunding offerings from $100,000 to $250,000 (potentially up to $400,000 at SEC discretion, based on advocate recommendations). Includes technical fixes to section references.
Venture Capital Adviser Threshold (Sec. 104): Increases the asset limit for exempt venture capital advisers from $150 million to $175 million, with inflation adjustments every 5 years.
SEC Small Business Offices (Sec. 105): Requires each major SEC division (Corporation Finance, Investment Management, Trading and Markets) to establish a Small Business Office to coordinate on capital formation rules, without adding new staff.
Small Entity Definition Review (Sec. 106): Mandates SEC studies (1 year after enactment, then every 5 years) on updating "small entity" definitions under the Regulatory Flexibility Act to reflect market growth. Requires rulemaking to expand coverage and inflation adjustments to dollar thresholds.
Information Access Exemptions (Sec. 107): Exempts the SEC's Small Business Capital Formation Advocate from most Paperwork Reduction Act requirements for data collection, but retains basic review processes.
Venture Capital Fund Limits (Sec. 108): Raises qualifying venture capital fund limits under the Investment Company Act from 250 to 500 investors and from $10 million to $50 million per company (with inflation indexing from enactment date). Requires a 5-year study on impacts (e.g., geographic diversity, founder demographics) and potential further adjustments (up to 750 investors or $100 million).
Venture Fund Investments (Sec. 109): Expands "qualifying investments" for venture capital funds to include secondary market purchases and investments in other venture funds, with a 49% cap on such holdings.

Title II: Increasing Opportunities for Investors

Accredited Investor Expansion (Sec. 201): Broadens the definition to include individuals with $1 million net worth (excluding primary residence, adjusted for inflation every 5 years), $200,000/$300,000 income, licensed brokers/advisers in good standing, or those with verified professional knowledge (via self-regulatory organizations). SEC must update Regulation D within 180 days.
Retirement Plan Exemptions (Sec. 202): Updates exemptions under multiple acts to include more 403(b) plans (e.g., for nonprofits, schools) if employers act as fiduciaries or review investments, covering governmental and certain private plans without full registration.
Investor Certification Exam (Sec. 203): SEC must create a free exam (within 1 year) to certify non-wealthy individuals as accredited investors based on financial knowledge (e.g., securities types, risks like illiquidity in private investments). Administered by national securities associations starting 180 days after creation.
Senior Investor Protections (Sec. 204): Establishes a 10-year SEC Senior Investor Taskforce (using existing staff/funds) to address exploitation, cognitive decline, and regulatory gaps for investors over 65. Requires biennial reports to Congress on trends, best practices, and recommendations. Mandates a GAO study on senior financial exploitation costs, frequency, and reporting gaps.
Electronic Document Delivery (Sec. 205): Allows brokers, funds, and advisers to deliver required documents (e.g., prospectuses, reports) electronically (email, website notices) with opt-out options, initial paper notices, and remediation for failures. Exempts from certain e-signature laws; self-regulatory organizations must align rules. If SEC delays, entities can proceed.
Closed-End Fund Investments (Sec. 206): Prohibits SEC from banning closed-end companies (including business development companies) from investing in private funds or listing securities tied to such investments, unless unrelated to the private fund's nature. Maintains fiduciary and valuation duties.

Title III: Strengthening Public Markets

Confidential Registrations (Sec. 301): Extends confidential SEC review of draft registration statements to all issuers (not just emerging growth companies), with public filing 10 days before listing or effectiveness. Protects submissions from disclosure under FOIA.
Business Development Company Fees (Sec. 302): Allows registered investment companies to exclude fees from business development companies in "acquired fund fees" calculations on registration forms.
Testing the Waters Expansion (Sec. 303): Permits all issuers (not just emerging growth) to gauge interest pre-filing via oral/written communications. SEC may add conditions for non-emerging issuers after reporting to Congress. Extends confidential reviews to follow-on offerings (48-hour public filing).
Acquired Company Financials (Sec. 304): Relieves emerging growth companies (and former ones) from providing pre-IPO audited financials for acquired companies, limiting to the earliest audited period in their initial filing.
IPO Cost Study (Sec. 305): Directs GAO (with SEC/FINRA input) to study IPO costs for small/medium companies (e.g., fees, compliance, litigation), compare to alternatives, and assess impacts on capital and retail access. Report due in 360 days with recommendations.
Well-Known Seasoned Issuer (WKSI) Threshold (Sec. 306): Lowers WKSI eligibility (for streamlined filings) from $700 million to $400 million in non-affiliate equity. Requires annual SEC reports on withdrawn ineligibility applications.
Multi-Class Share Disclosures (Sec. 307): Mandates proxy statements/filings for multi-class structures to disclose voting power percentages for directors, executives, and 5%+ owners.

Significant Changes to Existing Law

Threshold Increases: Raises limits on crowdfunding ($100K→$250K), adviser assets ($150M→$175M), venture fund investors (250→500), and investments ($10M→$50M); adds inflation indexing.
Exemption Expansions: Broadens accredited investor criteria beyond wealth to include knowledge/professional status; allows event-based solicitations and private fund investments by closed-end companies.
Procedural Eases: Extends confidential reviews and "testing the waters" to all issuers; permits electronic delivery as standard.
New Mechanisms: Introduces certification exams, small business offices, senior taskforce, and studies on definitions/costs.
Technical Fixes: Corrects section references, exempts certain actions from paperwork burdens, and clarifies plan exemptions.

Potential Impacts

Government Agencies: SEC faces increased rulemaking (e.g., exams, definitions), studies, and coordination (e.g., taskforces, advocates), but mandates use existing resources to avoid new hires/funding. GAO handles one-time studies. Self-regulatory groups (e.g., FINRA) must update rules.
Citizens: Small businesses/startups gain easier funding via crowdfunding, angels, and venture capital, especially in rural areas; investors (including non-wealthy via exams) access more opportunities, but seniors get targeted protections against exploitation. Retail investors may see more public small-company stocks, though with potential higher risks from relaxed rules.
International Relations: Indirect boost to U.S. competitiveness by lowering barriers for domestic innovation; no direct foreign policy effects, but could attract global capital to U.S. markets.

Main Stakeholders Affected

Small Businesses/Startups: Primary beneficiaries, including rural, women/minority-owned, and early-stage firms gaining funding access.
Investors: Accredited (expanded pool), angel groups, venture funds, retirement plan holders, and seniors (via protections/exam).
Financial Entities: SEC divisions, advisers, closed-end funds, business development companies, brokers/dealers, and exchanges (eased listings/investments).
Regulators/Enforcers: SEC (oversight burden), self-regulatory organizations (rule updates), state authorities (coordination on seniors).
Public/Retail Investors: Broader participation but need education on risks like illiquidity in private investments.

Notable Legal, Constitutional, or Political Implications

Legal: Enhances SEC flexibility (e.g., discretionary adjustments) but limits prohibitions (e.g., on private fund investments), potentially increasing enforcement challenges if investor losses rise. Expands fiduciary duties remain intact; electronic delivery could spur e-signature litigation if opt-outs fail.
Constitutional: Neutral; supports equal access (e.g., for rural/non-wealthy) without infringing rights, though broader exemptions might invite equal protection claims if benefits skew to certain groups.
Political: Advances deregulation for capital formation, appealing to pro-business interests, but balances with investor safeguards (e.g., disclosures, taskforces). Biennial reports and studies enable ongoing congressional oversight; sunset on senior taskforce (10 years) tempers long-term costs.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Wagner, Ann [R-MO-2]

Cosponsors (4)

Rep. Meeks, Gregory W. [D-NY-5], Rep. Torres, Ritchie [D-NY-15], Rep. Scott, David [D-GA-13], Rep. Sessions, Pete [R-TX-17]

Recent Actions

2025-12-15: Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
2025-12-11: Motion to reconsider laid on the table Agreed to without objection.
2025-12-11: On passage Passed by recorded vote: 302 - 123 (Roll no. 328). (Roll call 328)
2025-12-11: Passed/agreed to in House: On passage Passed by recorded vote: 302 - 123 (Roll no. 328). (Roll call 328)
2025-12-11: The House adopted the amendments en gros as agreed to by the Committee of the Whole House on the state of the Union.
2025-12-11: The previous question was ordered pursuant to the rule.
2025-12-11: The House rose from the Committee of the Whole House on the state of the Union to report H.R. 3383.
2025-12-11: The House resolved into Committee of the Whole House on the state of the Union for further consideration.
2025-12-11: Considered as unfinished business. (consideration: CR H5790-5793)
2025-12-10: Committee of the Whole House on the state of the Union rises leaving H.R. 3383 as unfinished business.
2025-12-10: On motion that the committee rise Agreed to by voice vote.
2025-12-10: Mrs. Wagner moved that the committee rise.
2025-12-10: POSTPONED PROCEEDINGS - At the conclusion of debate on the Waters amendment No. 5, the Chair put the question on agreeing to the amendment and by voice vote, announced the noes had prevailed. Ms. Waters demanded a recorded vote, and the Chair postponed further proceedings until a time to be announced.
2025-12-10: DEBATE - Pursuant to the provisions of H.Res. 936, the Committee of the Whole proceeded with 10 minutes of debate on the Waters amendment No. 5.
2025-12-10: DEBATE - Pursuant to the provisions of H.Res. 936, the Committee of the Whole proceeded with 10 minutes of debate on the Waters amendment No. 4.

Bill Versions

Incentivizing New Ventures and Economic Strength Through Capital Formation Act of 2025 — issued 2025-12-11 — PDF (66 pages)
Increasing Investor Opportunities Act — issued 2025-05-14 — PDF (5 pages)
Incentivizing New Ventures and Economic Strength Through Capital Formation Act of 2025 — issued 2025-12-15 — PDF (65 pages)
Increasing Investor Opportunities Act — issued 2025-06-25 — PDF (8 pages)