After months of debate and scrutiny, President Obama signed the Jumpstart Our Startups (JOBS) Act Thursday. The bill enables entrepreneurs to fund their businesses through crowdfunding and thus loosen access to capital in a tight market.
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The Senate passed the bill in late March, adding more regulations to the original JOBS Act passed by the House in November 2011. The bill now requires anyone acting as a “crowdfunding” intermediary to register with the SEC. The bill also requires companies to provide tax returns or financial statements to investors before the offering.
Karen Kerrigan, president and CEO of the Small Business & Entrepreneurship Council, who spent months lobbying on Capitol Hill in support of the bill, said the organization is thrilled to see politicians put aside their differences in support of an act that will support job creation.
"The lack of access to capital is holding budding entrepreneurs and promising firms back, and without money or credit these businesses cannot grow, innovate or create jobs. The JOBS Act is a potent mix of regulatory reforms and relief that will free up precious capital for growth, and create new models and platforms for businesses to raise funds,” Kerrigan said in a statement. “I look forward to working with small business leaders in the Congress to advance additional initiatives that will help entrepreneurs better compete and grow in the challenging global economy."
Rep. Sam Graves (R-MO), chairman of the House Small Business Committee, said he is hopeful the bill will provide some solutions to the ongoing issue of access to capital for startups.
“Americans who want to start new businesses currently face many discouraging obstacles that have dampened the entrepreneurial spirit of this country and damaged a critical source of job creation. Since 2007, we've seen a 23 percent drop in new business creation, according to the Bureau of Labor Statistics, and October’s annual World Bank's Doing Business report found that the United States fell to No. 13 for ease of starting a business, down from No. 3 in 2007,” Graves said in a statement. “The JOBS Act will help address our recently declining entrepreneurial track record by providing opportunities, increasing capital formation and paving the way for more small-scale businesses to go public and create more jobs.”