January 29, 2015
The Jumpstart Our Business Startups (JOBS) Act was signed into law in April 2012 and rules for small businesses to raise funds from non-accredited investors. This was due from the Securities and Exchange Commission (SEC) by December 2012. Those final rules are now over 500 days past due; the nascent “crowdfunding” industry is growing impatient.
Small business is the backbone of our economy. Title III of the JOBS Act will democratize fundraising and improve access to capital for startups and entrepreneurs by providing an online mechanism for companies to sell securities or equity in their businesses to non-accredited investors. An accredited investor must meet a personal net worth or income test that excludes the majority of the population. There are still rules about how much each person can invest for equity crowdfunding but Title III truly opens up the ability for the average American to invest.
The phenomenal success of rewards-based crowdfunding shows the thirst of the American public to support startups and small business projects by purchasing perks or making donations in exchange for products.