HB3323 updates the definition of an emerging growth company by raising the revenue threshold from $1 billion to $3 billion and by adjusting the criteria used under both the Securities Act of 1933 and the Securities Exchange Act of 1934. The bill also makes a technical correction to align section numbering and cross-references.
Taken together, these changes are intended to widen the set of firms that can rely on reduced disclosure rules.
In practice, more growth-stage firms could qualify as EGCs, potentially reducing regulatory costs during a critical expansion phase and helping them access public markets more readily. The bill does not alter the underlying investor protections framework itself, but it rebalances who benefits from lighter disclosures and who bears the remaining regulatory burden as companies grow.
At a Glance
What It Does
Raises the EGC revenue threshold to $3B under both acts and revises the qualifying tests by replacing 'fifth' with '10-year' and removing/adjusting downstream subparagraphs.
Who It Affects
Growth-stage issuers with revenues up to $3B, their investors, and the parties supporting IPO activity (underwriters, counsel, and regulators).
Why It Matters
Expands capital-formation opportunities for larger growth companies while recalibrating the workload and risk signals for markets and investors.
More articles like this one.
A weekly email with all the latest developments on this topic.
What This Bill Actually Does
The bill revises the Emerging Growth Company (EGC) criteria in two major securities statutes. First, it raises the revenue threshold from $1B to $3B, making more firms eligible for EGC status and its associated disclosure relief.
It also alters the test by changing a reference from five years to ten years and by removing one disjunctive condition, which can affect whether a company qualifies under the Act.
In addition, HB3323 includes a technical correction to realign section numbers and cross-references to ensure the statute reads consistently after the amendments. The intended effect is to extend lighter regulatory burdens to a broader set of growth-stage companies, thereby supporting capital-raising efforts as these firms scale.
Overall, the bill is about shifting the balance between capital access and disclosure requirements. It aims to help startups reach the next stage of growth by reducing some of the regulatory frictions faced during public-market transitions, while maintaining core investor-protection mechanisms within the EGC framework.
The Five Things You Need to Know
The EGC revenue threshold rises from $1B to $3B under both the 1933 Act and the 1934 Act.
The test replaces a reference to a ‘fifth’ year with a ‘10-year’ measure.
A disjunctive qualifier is removed and related punctuation is updated.
A technical correction redesignates a paragraph and tidy cross-references.
The net effect is broader eligibility for EGC status and extended disclosure relief for more growth-stage firms.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Short Title
This Act may be cited as the Helping Startups Continue To Grow Act. It sets the stage for the updated EGC criteria and related technical corrections that follow in Section 2.
Emerging Growth Company Criteria (Securities Act of 1933)
Section 2(a)(19) is amended to raise the revenue threshold for EGC status to $3,000,000,000 and to adjust the qualifying tests. The key changes include replacing the term ‘fifth’ with ‘10-year’ in the test, and removing a disjunctive clause, which broadens or narrows eligibility depending on the firm’s size and growth trajectory. These changes are designed to extend the window during which firms can claim EGC status and reduce reporting burden during a growth phase.
Emerging Growth Company Criteria (Securities Exchange Act of 1934)
Section 3(a) is amended similarly to Section 2(a), raising the threshold to $3B and updating the test to replace ‘fifth’ with ‘10-year,’ while adding an ‘or’ to the qualifying language and removing a separate subparagraph. The net effect aligns the 1934 Act criteria with the updated 1933 Act standard, creating parity in EGC qualification across major securities regimes.
Technical Corrections
This subsection tidies the statutory framework: redesignates the second paragraph of Section 3(a) to a new numbering (80 to 81) and corrects cross-references (for example, updating Section 4A’s cross-reference from ‘section 3(a)(80)’ to the correct current provision). These changes ensure consistency and avoid drafting ambiguities after the amendments in Sections 2(a) and 2(b).
This bill is one of many.
Codify tracks hundreds of bills on Finance across all five countries.
Explore Finance in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Growth-stage issuers with revenues up to $3B that qualify for EGC status and can rely on lighter disclosure requirements, supporting faster access to capital.
- Venture-backed startups considering an IPO, which may face a smoother transition due to extended relief.
- Underwriters, law firms, and corporate counsel serving growing companies seeking to go public, benefiting from a clearer, potentially expedited process.
- Investors and market participants who gain access to a broader set of EGCs seeking capital while retaining overall investor protections through the EGC regime.
- Private equity and venture capital firms that support portfolio companies approaching the EGC threshold and seek exit opportunities.
Who Bears the Cost
- Firms with revenues just above the $3B threshold that lose EGC eligibility sooner or must comply with more stringent disclosures earlier.
- SEC and regulatory staff may face higher volumes of filings from more entities qualifying as EGCs, increasing supervisory workload.
- Larger, more mature issuers that no longer benefit from EGC relief as readily as before may incur higher ongoing disclosure costs earlier in their growth cycle.
- Smaller firms that would have qualified under a lower threshold but now fall outside the EGC program may experience higher compliance burdens sooner in their life cycle.
Key Issues
The Core Tension
The central dilemma is balancing accelerated capital access for growth-stage companies against maintaining adequate investor safeguards. Expanding EGC eligibility to more firms reduces regulatory frictions for those companies, but could shift disclosure burdens onto firms that do not qualify or require careful calibration to avoid diluting investor protections when thresholds are pushed higher.
The bill’s expansion of EGC eligibility is intended to facilitate capital formation, but it introduces potential tensions between lighter, growth-friendly disclosures and the need for robust investor protections. As more firms qualify for EGC status, questions arise about whether the market-wide disclosure regime remains sufficiently protective for investors in high-growth, high-velocity firms.
Implementation will depend on how the SEC administers the updated criteria and whether any accompanying interpretive guidance or rules accompany the statutory changes. The cross-jurisdictional consistency between the 1933 Act and 1934 Act changes will also be important for market participants and filers who must navigate both frameworks.
Try it yourself.
Ask a question in plain English, or pick a topic below. Results in seconds.