Tuesday, March 13, 2012

How the JOBS Act Stacks Up for Small Business

Access to capital is one of the biggest issues facing small business today. The JOBS (Jumpstart Our Business Startups) Act, which was overwhelmingly passed in the House Thursday, is a package of 6 bills intended to create more access to capital for entrepreneurs and small business owners. But does it accomplish what it intended?

In this case, I think that the overall Act is quite positive and while not every aspect will directly impact small business, it is a great move in the right direction. Below are my thoughts on each of the Act's components and their effect on small business.

The Best for Small Business:


This legislation removes regulation prohibiting small businesses who are offering securities under Regulation D (which provides certain exemptions from having to register the securities with the SEC during capital raising) from using advertisements to solicit investors. This is particularly meaningful because the definition of an advertisement under the Reg D exemption was very broad and encompassed almost all forms of communication. This is a fantastic step in the right direction and given the social world we live in, where information is spread through constant connection, it is a no-brainer in my opinion. I believe that this component could be made even stronger by reducing some of the filing and paperwork associated with Reg D offerings. Read more.....

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