February 21, 2014
There should be an option in these rules for general solicitation of non-Accredited Investors, where an entrepreneur or business can solicit to lower income individuals via a website operated by that entrepreneur or business. And offer to issue stock without the use of a "funding portal."
This part of the rules could include limits to how much a non-Accredited Investor can invest not using a "funding portal" maybe no more than $1,000 regardless of income and no more than one venture annually. The offering would include how dollars will be spent, and harsh penalties to the issuer of stock for fraudulent offers.
For instance if a startup wanted to raise X amount of capital, and created a C-Corp, and offered common stock for $1.00 per share with good networking could gain a very large group of small investors to start the business. And currently proposed rules could make that offer expensive for all involved. Which will hold back many hopeful entrepreneurs from every reaching the first step of becoming a successful business startup. And this added rule to Title III would give local businesses a boost in capital from within its own community. Say John makes his own BBQ sauce, and sells it to a local restaurant, but doesn't produce enough revenue to grow for the next 10-15 years, but then can only grow enough to provide to one more restaurant in town. If he could pull capital from everyone in town he might be able to expand to several restaurants in town, and maybe even the next town over. Increased production beyond what he can do himself, therefore creating more jobs. But why should he be forced to go through a "funding portal" that will charge him for using their service, on what will likely be a per transaction fee? This only reduces the amount of capital available for expansion and make the "funding portal" wealthy as the portal will likely only have a few employees because the service is mostly automated.
The object of JOBS Act is to bring innovation to the forefront of American Business, and create jobs, but the cost for all involved for the proposed rules will likely hinder Congress's intentions as well as the Executive Administration's.