October 8, 2013
American Crowdfunding Association is a non-profit 501(c)3 (status pending) rooted in the 2012 Jumpstart Our Business Startups Act (the JOBS Act) which opened up the the possibility of two distinctive approaches for businesses to raise capital and to PUT AMERICANS BACK TO WORK The recovery from the Great Recession is not fulfilled until our Americans are put back to work – and with implementation of the JOBS Act, this can become a real possibility.
The JOBS Act first addressed the ability of businesses to advertise for accredited investors, which was not possible prior to this legislation. Before the JOBS Act, business owners had to rely on brokers, their own personal contacts, or dog pony shows to interest investors that met accredited investors requirements. Now, with the publication of the Final Rules on July 24, 2013, the effective date to allow businesses to advertise for accredited investors is September 23, 2013. The question will be how to do this and still meet the requirements of the Securities and Exchange Commission AND how to do so without incurring substantial fees and costs.
The second factor the JOBS Act addressed is the ability for small businesses to raise up to $1 Million a year from ANYONE using Crowdfunding. This is the exciting factor as it applies to a much broader arena of businesses and can be used much easier than the more expensive private placements used in the accredited investor scenario. While the Securities and Exchange Commission have yet to issue the Final Rules on Crowdfunding, but should do so with all haste. This is a game-changer for small businesses and every small business focused on growth, or in need of cash infusion, should benefit from this knowledge.
The American Crowdfunding Association emphasizes the need to move forward with this long awaited - and long overdue under the JOBS Act of 2012 guidelines - implementation of the JOBS Act of 2012. If we can't implement this act in less than 2 years, then we have too much red tape and that red tape is strangling our small businesses.
"Its a whole new game that levels the playing field for small businesses and start-ups. Believers in the American Dream should be at the starting line and listening for the gun shot to go, go go. Crowdfunding will be a complete game changer to small business and start-up financing."
Divina Westerfield, Attorney Manager, American Crowdfunding Association, Inc., 501(c)3