Federal INVEST Act Advances: What it Means for Life Sciences Innovation
Access to capital remains one of the most persistent challenges facing early-stage life sciences companies. On December 11, the U.S. House of Representatives took a significant step toward addressing that challenge by passing the Incentivizing New Ventures and Economic Strength Through Capital Formation (INVEST) Act, H.R. 3383, a bipartisan package of reforms designed to expand investment opportunities for startups and small innovative firms.
The legislation, strongly supported by the Biotechnology Innovation Organization (BIO) and MichBio, aims to modernize capital formation rules and remove regulatory barriers that can slow the translation of breakthrough science into real-world products and therapies.
The INVEST Act is a comprehensive capital markets reform bill that combines several proposals previously advanced on a bipartisan basis. At its core, the legislation seeks to make it easier for emerging companies—particularly those in capital-intensive sectors like biotechnology, medical devices, and diagnostics—to raise money at critical stages of growth.
Key provisions focus on:
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Reducing regulatory friction for companies seeking investment through angel networks, crowdfunding platforms, and public offerings.
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Expanding the pool of eligible investors by updating investor qualification rules and enabling greater participation in venture capital funds.
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Streamlining reporting and compliance requirements, allowing young companies to devote more time and resources to innovation rather than administrative burden.
Together, these changes are intended to improve the flow of capital to startups while maintaining appropriate investor protections.
The INVEST Act was introduced by House Financial Services Committee Chair Rep. French Hill (R-AR) alongside Rep. Gregory Meeks (D-NY) and a bipartisan group of co-sponsors. The bill passed the House with strong bipartisan support by a vote of 302–123, signaling broad recognition of the importance of capital access for economic growth and innovation.
Following House passage, the legislation now moves to the U.S. Senate, where stakeholders in the life sciences ecosystem will be watching closely for next steps.
Life sciences startups often face a uniquely challenging funding environment. Long development timelines, high technical risk, and significant regulatory requirements mean that access to patient, risk-tolerant capital is essential. Even promising technologies can stall if companies cannot bridge the gap between early discovery and later-stage commercialization.By modernizing capital formation rules, the INVEST Act has the potential to:
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Help early-stage biotech and medtech companies secure seed and Series A funding more efficiently.
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Encourage broader participation in venture investing, bringing new capital into the innovation ecosystem.
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Support regional innovation hubs, where startups may rely more heavily on angel investors and emerging funds rather than large coastal VC firms.
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Accelerate the translation of scientific breakthroughs into new therapies, diagnostics, and medical technologiesthat benefit patients.
BIO and MichBio, alongside other partners, have been an active supporter of the legislation, including participation in a coalition letter urging House passage. The organization has emphasized that startups and small businesses remain a primary driver of innovation and job creation.
The INVEST Act would help provide the capital and incentives needed for emerging biotechnology companies to move from scientific discovery toward real-world impact.
If enacted, the INVEST Act could represent one of the most meaningful updates to capital access rules for innovative startups in years. For the life sciences sector—where innovation depends as much on sustained investment as on scientific excellence—the bill offers a promising pathway to strengthen the U.S. innovation pipeline.
As the Senate considers the legislation, MichBio will continue to monitor developments and share updates relevant to Michigan’s and the nation’s life sciences community.
