Washington, DC – The Senate on Thursday passed legislation designed to remove some of the red tape encountered by entrepreneurs trying to raise capital, but tweaked it by adding more language meant to protect investors.

The Jumpstart Our Business Startups (JOBS) Act passed, 73-26, two weeks after initially clearing the House. The bill now heads back to House, where lawmakers are expected to vote on the revised version next week.

The act changes Securities and Exchange Commission (SEC) rules to create a new category of “emerging growth companies,” which would be able to file for initial public offerings (IPOs) while remaining exempt from certain financial disclosures and other requirements.

They also would be allowed to use the Internet to solicit investors in a practice generally known as “crowd-funding.”

Steve Case, the founder of investment firm Revolution and co-founder of AOL, said the legislation “will help entrepreneurs get faster access to capital to grow their companies and create jobs.”

This article was also published in Potomac Tech Wire.

Related links:

Sen. Toomey (R-Pa.) – statement of support

Revolution –press release

Photo by Flickr user FailedImitator, used under Creative Commons license