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Supporting Startups: Will the JOBS Act expand the crowdfunding crowd?

by Patrick J. Franke
Lane Powell PC - Seattle Office

Jessica F. Hoerschelmann
Lane Powell PC - Seattle Office

Matthew D. Viers
Lane Powell PC - Seattle Office

August 20, 2013

Previously published on August 16, 2013

Congress’ passage last year of the popular and bipartisan Jumpstart Our Business Startups (“JOBS”) Act was met with expectations of imminent and fundamental changes to the financing environment for early-stage businesses. Those that saw the JOBS Act as a game-changer focused on the Act’s “crowdfunding for the masses” provisions. Specifically, Title III amends existing law to exempt certain crowdfunding activities (i.e., the use of Internet and social media to raise relatively small individual investments from a large number of investors) from registration with the U.S. Securities and Exchange Commission (“SEC”). While these provisions potentially create a much larger pool of startup investors, Title III also significantly restricts the scope of lawful crowdfunding and establishes new disclosure and other compliance requirements for crowdfunding issuers and intermediaries.


The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.

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