Obama’s JOBS Act Boosts Crowdfunding

Posted April 25th, 2012 in Startups by Claire

The Jumpstart Our Business Startups Act (the JOBS Act), which was signed into law earlier this month, set the stage for a major expansion in crowdfunding. Crowdfunding is a means by which people can collectively invest small amounts of capital into a venture. Until the passage of the JOBS Act crowdfunding was seriously limited by securities laws designed to protect ‘unaccredited’ investors – ordinary people – from securities scams. The JOBS Act reversed many of those laws and makes it much easier for individuals to invest in companies. Small and mid-size startups, which are the most likely to seek crowdfunded investment, will likely benefit the most from the growth in crowdfunding, as they will now have a new pool of capital available to help expand their ventures.