Investing and Raising Capital via the JOBS Act Crowdfunding Provisions

April 30, 2012 - PRLog -- According to Wikipedia, "Crowdfunding, crowd financing, equity crowdfunding, or crowd sourced capital..describes a collective effort by people who..pool their money and resources together via the Internet, to support efforts initiated by other people or organizations." Crowdfunding can be used to fund a startup or existing company, or small business." The recently signed JOBS Act opens the door for companies to raise equity capital over the internet. The legislation, H.R. 3606, was signed into law by President Obama on Thursday, April 6, 2012.

We will host a webinar ($100.00) on this new effort. We will provide a social investing summary of the law, along with a summary of how businesses can use the law to enter the Crowdfunding market. To register for the webinar: : http://jobsact.eventbrite.com/

The law targets emerging growth companies and defines them as an issuer with “total annual gross revenues of less than $1,000,000,000 (one billion dollars)..during its most recently completed fiscal year.” These firms are now exempt from certain reporting requirements. Firms that issued stock on or before a certain date are still covered by the 34 Act, however.

Emerging growth companies do not need to file certain information or comply with certain financial accounting standards.

Broker/Dealers are exempt from certain restrictions concerning research. The “Quiet Period” for these issuers has changed.

The SEC is limited in several important aspects.

By providing a platform for the sale of emerging company securities, one does not need to register as a Broker/Dealer, provided you meet the qualifications to receive an exemption.

Issuer Restrictions/limits:
1.      $1,000,000 in funding in a 12 month period.
2.      Any individual investors are limited in the amount of securities they can purchase depending on investor net worth

Platform Requirements: To become a funding platform, vendors must fulfill 12 requirements.

Issuers (Emerging Growth Companies) have 5 requirements, and are liable for any untrue statements of material facts.

There are four trading restrictions and three exemptions.
In addition, the SEC must make a special effort to reach out to women, veteran and minority firms.

We will discuss the new law and the Crowdfunding market in detail. We will describe new financing options and tools. http://jobsact.eventbrite.com/