Posted on 15th June 2012 By syed
What?
- On April 5th, 2012, President Obama signed the JOBS act into law which aims at easing securities regulations to help encourage the financing of small business ventures in the United States.
Where?
- Currently legal in the UK
- Legal in all 50 states after SEC regulations are finalized
Why?
- To help small business and startups quickly raise the capital they need
- Encourage and foster entrepreneurial growth
When?
- SEC regulations are due to be out on or before December 30th, 2012
- Starting July 5th, 2012, businesses can raise up to $1,000,000 through equity crowdfunding but only through accredited investors (over $100,000 annual income) and with absolutely no solicitation
- Starting in early 2013, companies can start raising capital from all investor tiers through solicitation, in exchange for equity stakes.
Who?
- Individual entrepreneurs and small businesses can raise capital
- Individual Investors comprising of ordinary individuals will receive an equity portion most likely in the form of shares in exchange for the capital
How?
- Entities raising capital can raise $1,000,000 over a 12 month period through a growing number of online portals such as PeoplesVC, CrowdCube, EarlyShares, etc.
- Investment guidelines so far are:
- Individuals earning up to $40,000 a year and a net worth of less than $100,000 will be able to invest up to $2000 annually
- Investors who earn between $40,000 and $100,000 and a net worth of less than $100,000 can invest up to 5% of their annual income.
- Above $100,000, Individuals can invest up to 10% of their income and are considered to be accredited
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