Within recent legislation we are seeing bills, acts, and statues that are proposed and passed that target businesses and how they operate, start, grow etc… Among the most recent is the JOBS Act which had passed within the House of Representatives on March 8th, 2012 and is currently a topic of debate within Congress. The JOBS Act mainly addresses the issue of businesses not getting the financing or the start-up capital that they need to survive start-up and thrive in years to follow. It also creates a new category of publicly owned businesses entitled “Emerging Growth Companies” which are companies that will be exempt from certain regulations if they fall within a given revenue range. While the bill is actually very extensive, I have found an article on the Forbes website that highlights and talks about the JOBS Act’s key provisions. The link follows: http://www.forbes.com/sites/jjcolao/2012/03/21/jobs-act/
I wasn’t aware of this act being passed, but this is definitely some interesting legislation being passed. But will this help? In the article it is stated that, “The JOBS Act would actually open up the market for something like a Kickstarter for equity funding. In this scenario, Average Joe (i.e. a non-accredited investor) can chip in up to 10% of his annual income or $10,000 (whichever is less) in return for a small stake in a startup. Like any other investor, Joe would hope to fund the company’s growth so that his stake increases in value over time. According to the bill, companies seeking crowdfunding investment would need to file with the SEC and restrict this method of financing to $1 million a year ($2 million if they release audited financial statements).” This sounds to me like a lot of people who were unable to start business before will be helped, but there will also be a lot of fraudulent cases. I would like to see more details and checks on how this works and what proof is needed for someone to have access to this equity.