Jumpstart our Business Startups Act (JOBS)

The Jumpstart Our Business Startups Act (JOBS Act) was signed into law by President Barack Obama on April 5, 2012. The law was designed to make it easier for small businesses to raise capital by reducing the regulatory burden on crowdfunding and by creating a new class of "emerging growth companies" that would be exempt from some of the reporting requirements of the Sarbanes-Oxley Act.

The JOBS Act has been praised by some as a much-needed boost for the small business sector, while others have criticized it as a gift to Wall Street and a threat to investor protection. Only time will tell whether the JOBS Act will have the intended effect of stimulating the economy and creating jobs.

The JOBS Act has four main components:

• Crowdfunding: The JOBS Act created a new exemption from federal securities laws for "crowdfunded" offerings of securities. This exemption allows companies to raise up to $1 million from a large number of investors (known as "the crowd") through online platforms such as Kickstarter and Indiegogo.
• Emerging growth companies: The JOBS Act created a new class of "emerging growth companies" that would be exempt from some of the reporting requirements of the Sarbanes-Oxley Act. These companies would be eligible for the exemption for up to five years after they first go public.
• Regulation A+: The JOBS Act created a new "Regulation A+" exemption from federal securities laws for offerings of up to $50 million. This exemption is designed to make it easier for small businesses to raise capital by reducing the regulatory burden.
• Angel investor tax breaks: The JOBS Act provides tax breaks for angel investors who invest in small businesses. These tax breaks are designed to encourage angel investors to invest in small businesses and help them grow.

The JOBS Act has been controversial since its passage. Some critics have argued that the law will make it easier for fraudsters to scam investors, while others have argued that the law will do little to help small businesses raise capital. Only time will tell whether the JOBS Act will have the intended effect of stimulating the economy and creating jobs.