As of June 19, 2015 it will become much easier for small business startups to raise capital, as Title IV of the Jumpstart Our Business Startups Act of 2012 (“Act”) goes into effect. The new Act revises some of the regulation that, combined with limitations on availability to capital, has made it difficult, costly and time consuming for startups to get off the ground. The Act accomplishes this with the removal of the accredited investor requirement, an individual with a net worth of $1M or more or $200,000 in annual income, for small startups wishing to raise large sums of money, as well as eliminates the wait to be approved by state regulatory bodies and the requirement to issue quarterly reports and list their shares on an exchange. Additionally there is a “test the water” provision which allows startups to run their ideas by the media and investors before they are required to spend the money on a formal proposal to be reviewed by the Securities and Exchange Commission.
On June 19 small startups will be able to raise money, values of $20M to $50M, through crowdfunding programs. This means that any individual of adult age residing in the United States will be able to take part in small offerings.
About Red Oak Compliance Solutions
Red Oak Compliance Solutions is a leading provider of intelligent compliance software, offering a range of AI-powered solutions designed to help firms of all sizes successfully navigate the increasingly complex regulatory landscape. Our suite of 17(a)-4/WORM compliant features offer risk minimization, cost reduction, and process optimization capabilities with features that are designed to evolve with our client’s needs. Our flagship advertising review software enables firms to deliver compliant content to the market with confidence, faster. Our Disclosure Management and Intelligence solution simplifies the management of disclosures, while our Registration Management solution automates and streamlines the licensing and registration process, further enhancing your internal processes.