JOBS Act Pitched, but Equity Crowdfunding Hasn't Exactly Come Out Swinging
By Alicia Purdy, Managing Editor
It’s been nearly three years since President Obama signed the JOBS Act into law, revolutionizing the way small businesses will be able to raise capital – three, long years since equity crowdfunding became a very real possibility for cash-strapped companies snagged by SEC regulations and paperwork.
However, that very real possibility has yet to play out in any real way, trapping small businesses in a rule making cul-de-sac, awaiting the SEC’s next move (which was due, according to the law, by a Jan. 2013 deadline) before they can start to raise up to $1 million by selling equity in their company.
In a recent interview with Forbes, JOBS Act attorney Kendall Almerico pointed out, “There is no real means to hold [the SEC] accountable for not doing what the law says, so they can take their time and release the JOBS Act rules whenever they are ready.”
To be fair, the SEC did propose equity crowdfunding rules for Title III in October 2013, but nothing has been made final, and certainly no laws have been passed, making the JOBS Act equity crowdfunding idea just that – an idea. The SEC has been criticized for muddying a pretty straightforward process. On the other hand, with investor protections in mind, among other things, it’s certainly better to do right the first time rather than risk a legal nightmare once the scheisters inevitably come out of the woodwork. (SEC and FINRA got your back, read here)
So, how long will that be? (Asks every small business, everywhere…) Good question. Almericao predicted at least another year, if not more. Sit tight. Want to read more about the JOBS Act? Click here.