WASHINGTON -- Early this month, President Obama signed the JOBS Act into law, which ushers in a new era for securities regulations and eases the restrictions on small businesses to raise capital.
According to the White House, the bill includes a series of small business proposals that the President put forth earlier this year, and small businesses will start benefiting from the measures on day one. Among the provisions, there are 12 major benefits to small businesses. | See what's in the act
Much of the attention has been on the funding component of the bill, whose name stands for "Jumpstart Our Business Startups." There are 6 million small businesses in America, which have been hailed as the lifeblood the nation's economy, but most of them have been cut off from capital markets since the financial crisis. The JOBS Act, through "crowdfunding," is expected to alleviate small businesses' capital access problems and benefit investors in the process.
Crowdfunding (also crowd financing, equity crowdfunding or hyper funding) is the collective cooperation, attention and trust by people who network their money and other resources, usually via the Internet, to support efforts initiated by other people or organizations. Participants can raise as much as $1 million a year without having to do a public offering, which often requires state-by-state registrations that can cost thousands of dollars.
Bill Clark, chief executive of Microventures, writes about the JOBS Act and crowdfunding at Mashable.com