HALOS Act: New opportunities for startups and innovation in NJ!

HALOS Act: New opportunities for startups and innovation in NJ!

On May 16, 2025, US Congressmen Mike Lawler and Josh Gottheimer reintroduced the HALOS Act, which aims to promote investment in startups and clarify the legal framework for so-called 'Demo Days'. These events allow young companies to present their ideas to potential investors without being considered a public offering of securities. The HALOS Act is recognized as a bipartisan initiative aimed at supporting innovators so they can focus on product development instead of dealing with outdated SEC regulations.

The law clarifies the term angel investor in the context of the US securities laws and also defines general advertising under the Securities Act. Clarifying that Demo Days are not treated as securities offerings is critical to simplify pitches and investments for startups. This is particularly important in states like New Jersey, where over 950,000 small businesses create nearly half of the state's jobs. Gottheimer highlights the importance of the HALOS Act for economic development in New Jersey and emphasizes that this legislative initiative is intended to reduce bureaucratic hurdles and promote economic growth.

Reduce bureaucratic hurdles

Additionally, U.S. Senators Chris Murphy, Kyrsten Sinema, and Thom Tillis also introduced the HALOS Act to reduce regulatory hurdles for investors in startups. The law intends to make it easier for startups to access the necessary investments they need to expand. Murphy points to how important startups are to Connecticut's economy and how they help create new jobs.

Sinema added that the law will help Arizona entrepreneurs more easily receive investment, which is critical to economic growth. Tillis highlights the role of small business investors in providing critical support for startups. However, they are often deterred by unnecessary regulatory requirements. The existing investor vetting process that has been used at Demo Days for years is intended to be maintained by the HALOS Act to ensure that startups can continue to perform without strict regulations.

Finally, the HALOS Act demonstrates the need for bipartisan cooperation among lawmakers to address economic challenges. Supporting startups is widely seen as essential to U.S. innovation and could serve as a model for other initiatives to promote innovation and economic growth. The development of the existing legislative framework represents a significant step at a time when economic sustainability and growth are essential.