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Jump-start: Start-ups, small businesses get help from 'crowdfunding'

Friday, April 13, 2012   (0 Comments)
Posted by: Kristina Moy
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By Joyce M. Rosenberg, TheTownTalk.com

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.

Read more about crowdfunding and the jump-start for businesses



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