On April 5, 2012, President Barack Obama signed into law the Jumpstart Our Business Startups (JOBS) Act, dramatically changing the landscape for many companies raising capital.
Besides the most noticeable sections of the Act is Title III, the CROWDFUND Act, which facilitate entrepreneurs and small industry owners to put on the market limited quantity of equity in their corporation to a large quantity of investor via social networks and an assortment of Internet platforms.
For all practical purposes, selling equity interests in businesses via crowdfunding was prior to the CROWDFUND Act prohibited under United States securities laws.
The JOBS Act and Crowdfunding Harnessing the Power-and Money- Of the Masses case study solution
The Act tries to excuse crowdfunding from expensive registration demands and permit crowdfunding websites to avert the categorization of brokerage, which may impose significant registration prices on such sites. Through the CROWDFUND Act, equity-based crowdfunding has the capacity to open financing opportunities to countless underfunded entrepreneurs and little organizations. In further addition, it can substantiate investors with novel ways to spread-out their portfolio. However, the benefits of crowdfunding do not come without substantial hazards. Given the zeitgeist that altered regulations quickly, fundamentally risky companies, and the mixture of unsophisticated investors, crowdfunding has to be approached with caution.
PUBLICATION DATE: May 15, 2013 PRODUCT #: BH527-HCB-ENG
This is just an excerpt. This case is about LEADERSHIP & MANAGING PEOPLE
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