Technical corrections only. v2 adds a new subsection 2(c) that includes two technical amendments: one to redesignate a paragraph in the Securities Exchange Act of 1934 and another to update a cross-reference in the Securities Act of 1933. These changes are purely administrative and do not alter the substantive policy of the bill regarding emerging growth company criteria.
Helping Startups Continue To Grow Act
- Sponsor
- Rep. Steil, Bryan [R-WI-1]
- Committees
- Financial Services Committee (primary)
- Last action
- Jun 4, 2025
Bottom line
The bill expands the number of companies eligible for "emerging growth company" status and extends the duration of that status, allowing more companies to benefit from reduced regulatory requirements for a longer period.
What it actually does
This bill significantly updates the criteria for an "emerging growth company" (EGC) under federal securities law. It raises the maximum annual gross revenues a company can have to qualify as an EGC from $1 billion to $3 billion and extends the period a company can retain EGC status from 5 years to 10 years. Additionally, it includes minor technical corrections to the Securities Exchange Act of 1934.
Proponents argue
Supporters argue that the original EGC thresholds, set in 2012, are outdated and no longer reflect economic realities or inflation. They contend that updating these criteria will reduce compliance costs for growing companies, encourage more firms to go public, and foster capital formation, innovation, and job creation by delaying the full burden of public company regulations.
Opponents contend
Critics might argue that extending EGC benefits to larger, more mature companies, or for a longer duration, could diminish investor protections and transparency. They may contend that companies with revenues up to $3 billion or those public for up to 10 years should be subject to the full suite of public company regulations to safeguard investors, potentially increasing risks in the market.
The bill is exceptionally short and clearly written, making it very accessible for a reader to quickly understand its provisions and implications.
Section 2(a)(1) and 2(b)(1)
Increase Emerging Growth Company Revenue Threshold
This provision amends both the Securities Act of 1933 and the Securities Exchange Act of 1934 to raise the maximum annual gross revenues a company can have to qualify as an "emerging growth company" (EGC). The threshold is increased from $1,000,000,000 to $3,000,000,000. This change allows companies with significantly higher revenues to benefit from the reduced regulatory compliance requirements associated with EGC status.
Supporters argue
Supporters argue that the original $1 billion threshold, established in 2012, has not kept pace with inflation and economic growth. They contend that updating it will allow more growing companies to remain public longer, reducing compliance costs and encouraging capital formation and job creation by delaying the full burden of public company regulations.
Critics contend
Critics might contend that increasing the revenue threshold for EGC status could subject investors to less transparent financial reporting for larger, more established companies that should be subject to full public company regulations. This could potentially increase investment risk by delaying the application of important investor safeguards.
Tradeoffs
This provision balances the desire to reduce regulatory burdens for growing companies to encourage public market participation against the need to maintain robust investor protections through comprehensive disclosure and accountability.
Section 2(a)(2) and 2(b)(2)
Extend Emerging Growth Company Status Duration
This provision amends both the Securities Act of 1933 and the Securities Exchange Act of 1934 to extend the period during which a company can maintain its "emerging growth company" status. The duration is changed from 5 years to 10 years. This means that qualifying companies can benefit from the associated regulatory exemptions for an additional five years post-IPO, providing a longer transition period to full public company compliance.
Section 2(c)
Technical Corrections to Securities Exchange Act
This section makes two technical corrections to federal securities law. First, it redesignates a duplicate paragraph (80) in Section 3(a) of the Securities Exchange Act of 1934 as paragraph (81) to resolve a numbering conflict. Second, it corrects an internal cross-reference in Section 4A(a)(1)(B) of the Securities Act of 1933, changing it from "section 3(a)(80)" to the more general "section 3(a)", ensuring proper statutory referencing.
Redesignates the second instance of paragraph (80) in Section 3(a) of the Securities Exchange Act of 1934 as paragraph (81).
Section 2(c)(1)
Why it matters:This is standard legislative practice for correcting drafting errors or resolving numbering conflicts that arise from previous legislative actions. It is not intended to be evasive but rather to ensure the clarity and consistency of the statutory text.
Case for: Ensures the statutory text is clear and unambiguous, preventing potential confusion or legal misinterpretations due to duplicate numbering within the Securities Exchange Act.
Case against: No substantive case against; it is a cleanup measure that improves the accuracy of the law without policy implications.
Estimated impact: Minimal, primarily affecting legal interpretation and administrative clarity within the SEC and among legal professionals.
Amends Section 4A(a)(1)(B) of the Securities Act of 1933 to correct a cross-reference from "section 3(a)(80)" to "section 3(a)".
Section 2(c)(2)
Why it matters:This is standard legislative practice to ensure correct statutory cross-referencing, maintaining the integrity and functionality of the legal framework. It is not an attempt to obscure policy.
Case for: Ensures that the correct section of the Securities Exchange Act is referenced within the Securities Act of 1933, preventing potential misinterpretations or legal ambiguities arising from an incorrect citation.
Case against: No substantive case against; it is a cleanup measure that improves the accuracy of the law without policy implications.
Estimated impact: Minimal, ensuring proper legal interpretation and preventing potential confusion in regulatory application.