Crowd Funding – the Jump-start Our Business Start-ups (JOBS) Act

How about crowd-sourcing the funding of your new start-up venture? People have done it. And they have broken securities law in the process. For example, visionary web 2.0 company, kickstarter.com, has helped individuals with new ideas raise modest start-up funds. But these were all donations. Federal securities laws prohibit the people making the donations from receiving equity in return for their money.

But that has changed, the U.S. house and senate have passed the Jump-start Our Business Start-ups (JOBS) Act and President Obama signed it a few hours ago. The law’s main aspect is that small start-ups will be able to solicit modest amounts of funds absent onerous Securities and Exchange Commission reporting and disclosure regulations. There will still be oversight, but not the prohibitively expensive disclosure process previously required under securities law.

The major points of the act are discussed at crowdsourcing.org. The text of the act is here.

Content Contributor:

Charles Runyan, Ph.D. is of counsel at KEYT Law LLC. He holds an advanced degree in Chemistry and has extensive experience in chemical-based inventions, medical devices, and is accomplished in the mechanical arts. Additionally, his practice includes trademarks, copyrights, and all forms of intellectual property litigation.

 

For further information on this article, please contact:

Charles E. Runyan, Ph.D. J. D. | KEYT Law LLC

3001 East Camelback Rd. Suite 130 | Phoenix, AZ 85016

(602) 906-4953  |  cer@KEYTlaw.com

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