The JOBS Act

The JOBS Act

What is the JOBS Act?

The Jumpstart Our Business Startups (JOBS) Act was signed into law by President Obama on April 5, 2012. The law is a business reform that makes it easier for small businesses to raise capital. The idea being that the more successful small businesses there are out there, the more jobs they will generate.

Although the JOBS Act has a number of provisions that affect small business, the one that directly concerns CrowdFunding is the lift on the previous ban of “general solicitation” and advertising of stocks and securities, as well as the Senate amendment that allows small businesses to sell stock in their companies without first issuing a public offering.

This means that small startups that use CrowdFunding as their main source of raising capital would be able to sell shares of their company to the general public. This levels the playing field for investors, because currently only the very wealthy are allowed to invest money in privately owned companies.

Any US CrowdFunding site that wishes to sell stock in projects will have to register with the SEC and adhere to the SEC CrowdFunding requirements. The SEC will define these requirements in January. Until then, START.ac legally cannot (and will not) sell shares (equity) in any project.

START.ac intends to expand our business to include the selling of shares (equity) in START.ac projects as part of our fundraising process, when it is permissible to do so and according to the SEC regulations.

For more information on the JOBS Act refer to the U.S. Securities and Exchange Commission website at http://www.sec.gov/divisions/corpfin/guidance/cfjumpstartfaq.htm