The JOBS Act and crowdfunding: Harnessing the power–—and money–—of the masses |
Abstract:
On April 5, 2012, President Barack Obama signed into law the Jumpstart Our Business Startups (JOBS) Act, dramatically changing the landscape for many companies raising capital. One of the most interesting sections of the Act is Title III, the CROWDFUND Act, which enables entrepreneurs and small business owners to sell limited amounts of equity in their companies to a large number of investors via social networks and various Internet platforms. Prior to the CROWDFUND Act, selling equity interests in companies via crowdfunding was for all practical purposes illegal under United States securities laws. The Act attempts to exempt crowdfunding from expensive registration requirements and allow crowdfunding websites to avoid the classification of broker, which would impose substantial registration costs on such sites. Through the CROWDFUND Act, equity-based crowdfunding has the potential to open funding opportunities to countless underfunded entrepreneurs and small businesses. In addition, it can provide investors with new ways to diversify their portfolios. However, th benefits of crowdfunding do not come without substantial risks. Given the combination of unsophisticated investors, inherently risky businesses, and the zeitgeist that changed regulations quickly, crowdfunding must be approached with caution. |
| Keywords: |
JOBS Act; CROWDFUND Act; Equity-based crowdfunding; Small business; Entrepreneur |
| Author(s): |
Abbey R. Stemler |
| Source: |
Business Horizons (2013) 56, 271—275 |
| Subject: |
کارآفرینی |
| Category: |
مقاله مجله |
| Release Date: |
2013 |
| No of Pages: |
5 |
| Price(Tomans): |
0 |
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بر اساس شرایط و ضوابط ارسال مقاله در سایت مدیر، این مطلب توسط یکی از نویسندگان ارسال گردیده است. در صورت مشاهده هرگونه تخلف، با تکمیل فرم گزارش تخلف حقوق مؤلفین مراتب را جهت پیگیری اطلاع دهید.
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