Improving Entrepreneurs’ Access to Capital : Vital for Economic Growth

Capital formation improves economic growth, boosts productivity, and increases real wages. So does entrepreneurship — which also fosters discovery and innovation. Entrepreneurs engage in the creative destruction of existing technologies, economic institutions, and business production or management techniques by replacing them with new and better ones. Entrepreneurs bear a high degree of uncertainty and are the source of much of the dynamism in the U.S. economy. New, start-up businesses account for most of the net job creation. Entrepreneurs innovate, providing consumers with new or better products. By providing other businesses with innovative, lower-cost production methods, entrepreneurship is one of the key factors in productivity improvement and real income growth. To promote prosperity, Congress and the Securities and Exchange Commission need to systematically reduce or eliminate state and federal regulatory barriers hindering entrepreneurs' access to capital. Due to the many regulatory provisions blocking entrepreneurs' access to capital, a large number of policy changes are warranted