• Supporting Startups: Will the JOBS Act expand the crowdfunding crowd?
  • August 20, 2013 | Authors: Patrick J. Franke; Jessica F. Hoerschelmann; Matthew D. Viers
  • Law Firm: Lane Powell PC - Seattle Office
  • 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.