Finding investors is probably the biggest challenge that business
startups and small companies face. But small businesses are looking
forward to a new way of attracting investors now that President Barack
Obama has signed a law known as the JOBS Act.
The
law, Jumpstart Our Business Startups, eases the requirements that small
companies must meet to raise money. One of the most intriguing parts of
the law for many businesses is crowdfunding.
The new
rules make it legal for companies to solicit money from millions of
investors without having to go through the lengthy process of filing
registration documents with the Securities and Exchange Commission. The
law dramatically streamlines the paperwork that companies must complete.
Obama signed the bill into law last week.
"It will make it
easier for small businesses to attract investors, to gain access to
capital, to become the next big thing," said Tom Quaadman, a vice
president of the U.S. Chamber of Commerce.
Small businesses
probably won't be able to start seeking investors until at least the
end of this year, said David Scileppi, an attorney with the Gunster Law
Firm in Fort Lauderdale, Fla., which specializes in business law. That's
because the SEC must put together rules to govern how crowdfunding will
work within nine months of its becoming law.
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