10 years later: how the JOBS Act has revolutionized capital raising

It’s been ten years since the JOBS Act was passed, enabling companies to raise capital in ways never before possible. What started in Washington, the brainchild of David Weild IV, is now a well-oiled machine that has funded thousands of companies and is?constantly evolving. Ten years on, the various JOBS Act regulations have been put to great use, and we are only at the tip of the iceberg.?

Looking Back Ten Years

The JOBS Act was passed in 2012 to help small businesses and startups raise capital. The main idea was to make it easier for private companies to raise money from investors, without requiring them to go through the cost-intensive process of going public. The JOBS Act did this by introducing new regulations, such as Reg D, Reg CF, and RegA+ for raising capital from accredited or non-accredited investors.

Before the JOBS Act, companies were limited in raising money. They could only raise money from accredited investors and eventually needed IPO to access such a hefty amount of capital. With recent expansions of regulations like RegA+ and CF, companies can now raise $75 million and $5 million, up from $50 to $1.07 million. On the tenth anniversary of this monumental legislation, we can look back and see how this legislation has impacted businesses and the economy as a whole.

A Monumental Success

The JOBS Act has been a monumental success in helping businesses?raise significant capital. The various regulations have allowed companies to raise more money while remaining private and giving them more fundraising options.?

One of the most popular regulations is Reg A+, allowing companies to raise up to $75 million from non-accredited investors. This has allowed thousands of companies to raise billions in capital, with an estimated?$1.48 billion?being raised with Reg A+ in 2021 alone. In addition, the exemption has been upgraded to make it significantly more usable and has seen a surge in businesses utilizing it.?

“The JOBS Act is already a great success.?Investment in entrepreneurship, innovation, jobs, and upward mobility is growing.?The Act tripled the amount of biotech IPO activity in 2012 when it was implemented.?It led to an entirely new ecosystem of more than eighty (80) FINRA-regulated crowdfunding portals.?And, we are well on our way to our first $100 billion dollar year in financing from Reg. 506(c) and Reg. A+ combined.?But, we must do much more if the United States is going to regain its advantage in starting entire new industries and restoring the American Dream.” – David Weild IV, Father of the JOBS Act

Another popular exemption is Reg CF, which allows businesses to raise up to $5 million from non-accredited investors.

Reg D has also been popular, allowing businesses to raise capital from accredited investors only, and has been a popular option for companies looking to remain private.?

Keeping Companies Private

The JOBS Act has many benefits for companies who want to raise capital, but staying private is one of the biggest advantages. Staying private is growing even more attractive to companies, especially considering they can make a secondary market available for shares bought under JOBS Act exemptions.?

Plus, by raising capital through these methods, companies can continue to grow and expand without worrying about private equity firms or other investors taking control. This allows the company to maintain its independence and gives management the ability to make long-term decisions without worrying about short-term results.?

The JOBS Act has made it easier for companies to stay private by increasing the amount of capital they can raise and reducing the regulatory burden. This has made these regulations a very popular option, evening the playing field and decreasing the reliance on IPOs to raise capital.

Continued Success for the JOBS Act

The JOBS act has been a resounding success in helping businesses raise capital. This is because the JOBS act allows businesses to raise money in new ways. Additionally, the JOBS act opens the market to a wider pool of potential investors, allowing even the everyday person to enjoy the opportunity to invest in a promising company on the ground floor. The success of the JOBS act has been a boon for the economy as well, helping to create jobs and spur innovation.

“I think one thing we never foresaw was the extent to which marketing was going to be crucial to the success of the crowdfunding space. But it is.” – Sara Hanks, CEO and Co-Founder of CrowdCheck, Inc.

The JOBS Act has been a great success, benefiting entrepreneurs and investors alike. After ten years and the recent increase in the amount companies can raise, the JOBS Act has continued to be an attractive opportunity for private companies. It will also be exciting to see how this space continues to evolve into the future?

The JOBS Act has been in effect for ten years now, and it has completely revolutionized the way companies raise capital. Regulations like RegCF and RegA+ have made it significantly easier for companies to access capital, and?KoreConX?has been there every step of the way to help companies navigate these new waters.

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