The U.S. House of Representatives today overwhelmingly approved (390:29) the Jumpstart Our Business Startups Act (JOBS Act), sending a strong message to small business: we support you. The NSBA-supported JOBS Act—which is a compilation of six bipartisan bills—will promote and facilitate entrepreneurship and new business formation by making it much easier to raise capital and get new ideas off the ground.
“The bipartisan efforts to move this bill forward are laudable, and ought to serve as an example of the kind of lawmaking we need,” stated NSBA President Todd McCracken. “We hope the Senate will move quickly and expeditiously on the measure.”
By providing certain exemptions from the more restrictive requirements of U.S. securities law, the JOBS Act will positively transform the ability of small businesses to raise capital and alleviate the disproportionate burden of compliance they face. Specifically, the legislation will create a crowdfunding exemption allowing a company to raise up to $2 million and provide greater leeway for seeking investment online through a preemption of state blue sky laws—a critical component to ensure the affordability of capital formation through crowdfunding.
The bill also substantially reduces the cost barriers posed by the initial move to being a public company and will therefore increase the access of smaller companies to the public securities market. The number of initial public offerings (IPOs) has declined considerably in recent years in large measure due to the increased costs of going and staying a public company.
“There is a direct correlation between access to capital and job growth—when capital flows more freely, small businesses add new jobs,” stated NSBA Chair Chris Holman, CEO of Michigan Business Network.com and President of The Greater Lansing Business Monthly. “The JOBS Act will make raising capital much easier for many small businesses, a win for small business and the U.S. economy.”