Helping Startups Continue To Grow Act

Bill Summary: Helping Startups Continue To Grow Act (H.R. 3323)

Overview

The Helping Startups Continue To Grow Act (H.R. 3323) is designed to expand and extend the "on-ramp" provisions originally established by the JOBS Act. Its primary purpose is to encourage more startups and emerging companies to go public by reducing the regulatory burden and disclosure requirements they face during their early years of growth.

By updating the definition of an Emerging Growth Company (EGC), the bill aims to facilitate capital formation and allow companies to scale more effectively before they are required to meet the full, rigorous compliance standards of mature public companies.

Key Provisions and Changes

The bill implements three primary changes to the criteria used to determine if a company qualifies as an Emerging Growth Company (EGC) under the Securities Act of 1933 and the Securities Exchange Act of 1934:

1. Increased Revenue Threshold

• Current Law: Companies generally qualify as EGCs if their total annual gross revenues are less than $1 billion.
• Proposed Change: The threshold is increased to $3 billion. This allows significantly larger companies to benefit from reduced disclosure requirements.

2. Extended Exemption Period

• Current Law: The "on-ramp" status and its associated exemptions generally last for five years following the first sale of common equity securities.
• Proposed Change: This period is extended to 10 years, doubling the amount of time a company can operate under streamlined regulatory requirements.

3. Removal of "Large Accelerated Filer" Disqualification

• Proposed Change: The bill strikes the provision that automatically disqualifies a company from EGC status if it is deemed a "large accelerated filer." This removes a major barrier for rapidly growing companies that may hit certain size milestones but still desire the EGC reporting benefits.

Who is Affected?

• Startups and Mid-Sized Companies: Companies preparing for or recently completed an Initial Public Offering (IPO) will have a longer window and a higher revenue ceiling to maintain reduced reporting requirements.
• Investors: While the bill maintains existing liability and core disclosure requirements, investors may see differences in the level of detailed financial reporting provided by companies that remain EGCs for longer periods.
• The SEC: The Securities and Exchange Commission will continue to oversee these companies and will be responsible for indexing the new $3 billion threshold for inflation every five years.

Procedural and Timeline Details

• Legislative History: This bill is an iteration of similar legislation introduced in the 115th, 116th, 117th, and 118th Congresses.
• Current Status: As of June 4, 2025, the bill was reported favorably by the Committee on Financial Services (with a vote of 31 yeas and 20 nays) and committed to the Committee of the Whole House on the State of the Union.
• Implementation: If passed, the changes to the definition of EGCs would apply to the registration and reporting requirements governed by the SEC.