The White House called for making it easier for small companies to raise money by selling shares to the public as part of a package of proposals intended to aid small businesses.

For some small companies going public, the change would delay some requirements of Sarbanes-Oxley that have to do with internal controls.

“We define a new kind of company that we call an emerging growth company,” says Mary Miller, the Treasury Department’s assistant secretary for financial markets. “We are trying to loosen up some of the requirements that make it difficult for a company to price an IPO,” she said on a conference call with reporters today.

Specifically, the change would apply to companies with revenue under $1 billion that have issued less than $1 billion in debt and are floating less than $700 million in publicly-held shares, according to an outline provided by the White House (PDF). The so-called “IPO on-ramp” period would last up to five years. Businesses would still be subject to the other reporting requirements that apply to public companies.

(Some more background on the piece of SarbOx, the post-Enron law designed to prevent financial fraud, that would be loosened for small companies is here.)

Startups and venture capitalists have long complained that the high costs of complying with regulations discourage startups from going public. The National Venture Capital Association backed the IPO on-ramp idea in testimony in December (PDF) and suggests that it would apply to less than 15 percent of companies now trading on U.S. exchanges.

White House officials on the conference call, including Small Business Administration chief Karen Mills, kept repeating that the president’s small business proposals today are intended to get bipartisan support in Congress. That may seem unlikely in an election year and a Congress in gridlock with bitter divisions. But easing rules for small businesses raising capital was one issue both parties in the House, at least, could get behind last year.

Filed under: Small Biz

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