The Sarbanes–Oxley Act of 2002, Public Law 107–204, July 30, 2002.
 The Dodd–Frank Wall Street Reform and Consumer Protection Act, Public Law 111–203, July 21, 2010.
 See, for instance, Michele Meoli, Katrin Migliorati, Stefano Paleari, and Silvio Vismara, “The Cost of Going Public: A European Perspective,” International Journal of Economics and Management Engineering, Vol. 2, No. 2 (May 2012).
 If the hurdle rate (the minimum rate of return required by investors) is X, where X is the expected profit (P) divided by the investment (I), then, with costs of 10 percent, the effective amount raised will be 0.9I (that is, 90 percent of the amount invested by investors) and the profit on the amount invested will have to be 11.1 percent higher to achieve the hurdle rate. For example, if the hurdle rate were 10 percent, the profit required on an investment of $1,000 would be $100. If the amount raised net of costs were only $900, a profit of $100 on that $900 would be necessary to achieve the investors’ hurdle rate on an investment of $1,000. $100/$900 is 11.1 percent, which in turn is 11.1 percent higher than the 10 percent hurdle rate. If the required hurdle rate were 30 percent (not atypical in highly risky investments), the investors will require a profit (P) of $300 annually on the $1,000 investment. Thus, the net of cost $900 would have to earn a return of $300 or 33.3 percent, 11.1 percent higher than the hurdle rate of 30 percent. In short, the return will have to increase by the inverse of net of costs amount raised divided by the amount invested.
 Because 1/0.8 is 1.25. Following the 30 percent example above, $300 divided by the net of cost $800 raised is 37.5 percent, and 37.5 percent is 25 percent higher than 30 percent.
 See, for instance, “Management Effectiveness Information & Trends,” CSIMarket.com, http://csimarket.com/Industry/industry_ManagementEffectiveness.php (accessed June 6, 2014).
 The discount rate is the interest rate used to “discount” money to be received in the future rather than in the present. Money received now is more valuable than money received in the future because it can be used to earn a return in the interim. Similarly, costs incurred now are more costly than the same dollar costs in the future.
 The present discounted value of $1.5 million annually with a 10 percent discount rate is $15 million.
 Magnus Henrekson and Dan Johansson, “Gazelles as Job Creators: A Survey and Interpretation of the Evidence,” Small Business Economics, Vol. 35 (2010), pp. 227–244.
 Regulation D is a safe harbor provision implementing the private placement exemption of §4(a)(2) of the Securities Act. It is by far the most used exemption. Almost $1 trillion annually is raised using Regulation D. See Burton, “Don’t Crush the Ability of Entrepreneurs and Small Businesses to Raise Capital.”
 See, for instance, Antonio Davila, George Foster, and Mahendra Gupta, “Venture-Capital Financing and the Growth of Startup Firms,” Journal of Business Venturing, Vol. 18, No. 6 (2003), pp. 689–708, http://econpapers.repec.org/article/eeejbvent/v_3a18_3ay_3a2003_3ai_3a6_3ap_3a689-708.htm (accessed June 3, 2014).
 The Jumpstart Our Business Startups Act, Public Law 112–106, April 5, 2012.
 U.S. Securities and Exchange Commission, “Report on Review of Disclosure Requirements in Regulation S-K,” December 20, 2013, http://www.sec.gov/news/studies/2013/reg-sk-disclosure-requirements-review.pdf (accessed April 7, 2014).
 Ibid., pp. 93–94.
 Ibid., p. 95.
 See the initial draft of the “Disclosure Modernization and Simplification Act of 2014,” http://financialservices.house.gov/UploadedFiles/BILLS-113hr-PIH-10KSK-G000548.pdf (accessed June 6, 2014). See also, the summary contained in the Committee Memorandum in connection with the April 9, 2014, hearing on “Legislative Proposals to Enhance Capital Formation for Small and Emerging Growth Companies,” http://financialservices.house.gov/UploadedFiles/040914_CM_Memo.pdf (accessed June 6, 2014). H.R. 4569 was reported out of committee on May 22, 2014.
 Ibid., pp. 94–95.
 Stephen M. Graham and M. Christine Jacobs, Committee Co-Chairs, letter to SEC Chairman Elisse B. Walter, “Recommendations Regarding Disclosure and Other Requirements for Smaller Public Companies,” March 21, 2013, http://www.sec.gov/info/smallbus/acsec/acsec-recommendation-032113-smaller-public-co-ltr.pdf (accessed April 7, 2014).
 U.S. Securities and Exchange Commission, “Final Reports of the SEC Government-Business Forum on Small Business Capital Formation,” http://www.sec.gov/info/smallbus/sbforumreps.htm (accessed April 7, 2014).
 Regulation A implements the small-issue exemption contained in the Securities Act. Regulation A+ is a reference to the revisions required by the JOBS Act. For a more detailed discussion, see David R. Burton, “Regulation A+ Proposed Rule Needs Work,” The Heritage Foundation, The Daily Signal, April 8, 2014, http://dailysignal.com/2014/04/08/regulation-plus-proposed-rule-needs-work/, and David R. Burton, “Proposed Rule Amendments for Small and Additional Issues Exemptions under Section 3(b) of the Securities Act,” comments to SEC Secretary Elizabeth Murphy, March 21, 2014, http://www.sec.gov/comments/s7-11-13/s71113-52.pdf (accessed June 9, 2014).
 For more information on the JOBS Act crowdfunding exemption, see David R. Burton, “SEC Crowdfunding Rules Need Work,” The Heritage Foundation, The Daily Signal, February 11, 2014, http://dailysignal.com/2014/02/11/sec-crowdfunding-rules-need-work/.
 David R. Burton, “Regulation A+ Proposed Rule Needs Work,” The Heritage Foundation, The Daily Signal, April 8, 2014, http://blog.heritage.org/2014/04/08/regulation-plus-proposed-rule-needs-work/; David R. Burton, “SEC Crowdfunding Rules Need Work,” The Heritage Foundation, The Daily Signal, February 11, 2014, http://blog.heritage.org/2014/02/11/sec-crowdfunding-rules-need-work/; and David R. Burton, “Regulation D Rule Would Harm Entrepreneurs and Economic Growth,” The Heritage Foundation, The Daily Signal, November 13, 2013, http://blog.heritage.org/2013/11/13/regulation-d-rule-would-harm-entrepreneurs-and-economic-growth/. Each blog contains a link to a comment letter by the author to the SEC with detailed analysis.
 David R. Burton, “Proposals to Enhance Capital Formation for Small and Emerging Growth Companies,” testimony before the Subcommittee on Capital Markets and Government Sponsored Enterprises, Committee on Financial Services, U.S. House of Representatives, April 11, 2014, http://www.heritage.org/research/testimony/2014/04/capital-formation-for-small-and-emerging-growth-companies.