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Jobs Act

Jobs Act

  • Term

    Main definition

  • Jobs Act

    This refers to the Jumpstart Our Business Startups ("JOBS") Act. The act contains five distinct sections, reflecting that the act was a combination of multiple distinctly different bills from various sponsors in the houses of Congress.  The apparent aim of the act is to help to encourage funding of United States small businesses.  The connection between this law and small business funding and formation is that it accomplishes its goals by reducing teh burden on small business capital raising that is posed by the securities laws in existence before.  Growth capital leads to greater job creation, whereas SEC rules and regulations stand between growth capital and the small businesses that need it.  Having the acronym JOBS, this act obviously was named purposefully to draw attention to the connection between capital and small businesses and jobs growth.  AngelList co-founder Naval Ravikant spent six months lobbying for particular of the JOBS Act reforms, recalled the naming of the bill this way, 'It ended up being a giant dog's breakfast of different bills combined together, and then some genius, probably some congressional staffer, said 'How are we gonna get this thing to pass? Oh-- let's say it has something to do with jobs. Jumpstarting Our Business Startups! JOBS, JOBS!' And then, what congressperson can vote against something called the JOBS Act? It was a miracle." The easing particular securities regulations in a healthy way can reduce the cost and energy required for smaller companies to offering and selling securities to raise capital.  Permission is given in one part of the act for businesses to use the widest modern means of communication to convey the offers of their securities. The offers will be disseminated publically and generally everywhere with the permitted purpose of reaching out to raise capital from any accredited investors who may also come across the offers.  Excessive regulation has had an unfortunate effect of dampening investment activity, and the act is intended to eliminate or substantially modify some of the existing securities rules.  The rules eliminated or substantially modified include some rules that were deemed of limited necessity, if any, for the protection of the investors concerned. The act takes effect in stages, and some of the act has taken effect.  Portions of the act have a protracted implementation involving delays by the SEC in carrying out its rulemaking authority.

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