While small businesses have long been the engine that drives the U.S. economy, their efforts to raise capital, as well as access to it, can either help or hinder their growth. Startups are responsible for producing an average of 3 million jobs within the first year, while existing companies cut a million jobs annually. President Barack Obama signed the Jumpstart Our Business Startups Act, or JOBS Act, into law on April 5, 2012, which makes it easier for small companies to raise money, including through initial public offerings.
With millions of dollars exchanging hands, regulation was imminent. Here are four reasons the JOBS Act was enacted:
-Establish Investment Limits:Ensure investors do not exceed statutory investment limits by establishing standardized communication and reporting across all platforms globally.
-Create Investor Protection: Establish investor Bill of Rights, criminal background checks on issuers as well as disclosures.
-Establish standard communication processes:This would help to secure the information flow between the issuer, investor, and regulatory agency is impermeable.
-Establish a code of conduct for crowdfunding platforms:There currently is not a universally established code of conduct that is shared globally across all platforms.
Founded in 2010, the industry website, Crowdsourcing.org, is a neutral organization dedicated solely
to crowdsourcing and crowdfunding. As one of the most influential and credible authorities in the crowdsourcing space,
Crowdsourcing.org is recognized worldwide for its intellectual capital, crowdsourcing and crowdfunding
practice expertise and unbiased thought leadership.