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JOBS Act
CHAPTER 3: Alternative Assets and the “Average” Accredited Investor
Overview of the Jumpstart Our Business Startups Act of 2012 Editor’s Note: This is the third installment in a series of articles dedicated to the 95% of people in the U.S. who have never invested in a startup, a venture capital fund, a private equity fund, or a hedge fund even though they are permitted […]
Lessons on Investing like an Angel
Editor’s Note: This is an updated version of an article first published on March 6th, 2014. Around the time the JOBS Act became law in 2012, some angel groups expressed concern that equity crowdfunding would hurt them on two counts. First, there was a concern that more money would chase deals, thus inflating valuations on potential […]
Qualified Business Income: What to Expect from New Sec. 199A Updates
What Qualifies as Qualified Business Income? In the six months following the passage of the landmark Tax Cuts and Jobs Act, the business community has been anxiously awaiting clarifications on certain aspects of the legislation. Specifically, the area that defines qualified business income. Now, guidance is finally on the way. In summer 2018, the IRS […]
Legacy of 2012 JOBS Act: Deregulation of Angel Investing
Editor’s Note: This is an updated version of a similar article, published in January of 2013. To view that article, click here. The JOBS Act Makes Raising Capital Easier Than Ever Signed into law by President Obama on April 5, 2012, the Jumpstart Our Business Startups Act (or JOBS Act) made it somewhat easier, and often […]
The Coming Startup Crash?
My point here is simple: when stupid idea after stupid idea attracts investors, it’s a forward indication that a market is too frothy. When a market sees repeated examples of industry participants making things up, it’s a forward indication that a market has become dangerous.
Wefunder Dominates Equity Crowdfunding
When “true” equity crowdfunding launched on May 16, 2016, Wefunder led the new asset class with 10 Title III offerings. Within a few days it added 11 more offerings. No other funding portal that I know of has half as many Title III offerings as Wefunder.
Title IV (Regulation A+)
Title IV of the Jumpstart Our Business Startups (JOBS) Act of 2012 expands the moribund Regulation A exemption by increasing the raise limit from $5 to $50 million. Non-accredited investors could participate in Reg A offerings before 2012, and they still can under Title IV but with certain limits.
Intrastate Equity CrowdFinancing
The Jumpstart Our Business Startups (JOBS) Act was signed into law in March 2012. Title III of the act, which legalized equity crowdfunding, could not launch until the SEC issued final rules for the operation of funding portals.Meanwhile, some states decided to get their own jumpstart going. Relying on the intrastate exemption from SEC registration, at least 24 states—led by Kansas and Georgia—have enacted legislation or promulgated regulations that allow unlimited numbers of non-accredited investors (everyone) to participate in small private securities offerings.
Portals & Broker-Dealers
Two kinds of intermediaries may conduct Title III equity crowdfunding offerings and transactions: (1) funding portals that are not registered broker-dealers, and (2) offering platforms that are registered broker-dealers. Both kinds must be registered with the Securities and Exchange Commission (SEC).
What’s an Angel Investor?
Angels often provide the first round of “outside” capital—that is, outside of the founders’ employees, family, and friends (the three Fs). Angel capital may be in the form of straight debt, convertible debt, or equity
