Summary of HR 3352 - HALOS Act of 2025

Overview

The Helping Angels Lead Our Startups Act of 2025, commonly referred to as the HALOS Act of 2025, was introduced in the House of Representatives on May 13, 2025. The bill aims to facilitate investment in early-stage companies by clarifying regulations surrounding general solicitation in the context of startup funding. It has passed the House and is currently under consideration in the Senate.

Purpose and Intent

The primary purpose of the HALOS Act is to:
- Define angel investors within federal securities laws.
- Clarify the rules regarding general solicitation to allow startups to present their business ideas at specific events without being classified as making an investment offering.

This legislation is designed to support startups by easing the restrictions on how they can communicate with potential investors, thereby fostering innovation and economic growth.

Key Provisions

The HALOS Act includes several important provisions:

1. Definition of Angel Investor:

   • An angel investor group is defined as a collective of accredited investors who invest personal capital in early-stage companies and have established processes for making investment decisions.

2. Clarification of General Solicitation:

   • The Securities and Exchange Commission (SEC) is required to revise Regulation D to ensure that discussions at certain events (e.g., demo days) are not considered general solicitation.
   • Events that qualify for this exemption include those sponsored by:
     • Government entities (federal, state, local)
     • Educational institutions
     • Nonprofit organizations
     • Angel investor groups
     • Incubators and accelerators
     • Trade associations

3. Event Requirements:

   • Events must not be held in facilities owned by religious organizations (except accredited educational institutions).
   • Advertising for the event must not reference specific securities offerings.
   • Sponsors of the event must not provide investment advice or recommendations and must disclose risks associated with investing.

4. No Pre-existing Relationship Requirement:

   • Attendance at these events does not establish a pre-existing relationship between issuers and potential investors, which is significant for compliance with existing securities regulations.

Impact

The HALOS Act is expected to:
- Encourage Investment: By allowing startups to showcase their products and business plans more freely, the bill aims to attract more angel investments into early-stage companies.
- Support Economic Growth: By facilitating easier access to funding, the legislation could lead to increased innovation and job creation in the startup sector.

Legislative Status

• The bill was passed in the House on June 23, 2025, after a brief debate and a motion to suspend the rules.
• It has been received in the Senate, read twice, and referred to the Committee on Banking, Housing, and Urban Affairs for further consideration.

Conclusion

The HALOS Act of 2025 represents a significant step towards modernizing the regulatory framework for startup funding, aiming to enhance the ability of early-stage companies to connect with potential investors while ensuring compliance with securities laws.