What the JOBS Act Would Do

Small businesses are critical to Florida’s economy, and “tomorrow,” they are even more important because of increasing global competition. Most research and economic analysis shows that small businesses create a bulk of net new jobs, employ more than 50% of the workforce and account for approximately 1/3 of the difference between a strong economy and a weak economy.

The JOBS Act, being debated in Washington, offers a multi-faceted approach to support small businesses and the creation of new firms. Here are a few highlights:

  • “Crowdfunding”- Startups and small businesses could now file with the SEC and solicit investments from non-institutional investors (like you and me) on a small scale (up to 10% of annual income or $10,000- whichever is less) to help build their companies.
  • Raises cap on private shareholders from 500 to 2000- Currently, companies that grow quickly, hire more employees and make them shareholders, face a quick road to going public that may not be the best option for their long-term strategy or ability to create jobs. This part of the bill gives fast growing companies an avenue to stay a private company, while bringing in new top talent with shareholder privileges, if they aren’t ready to go public.
  • Make going public less burdensome- This part of the bill gives companies an easier and less costly route to going public by removing some of the regulations that large corporations face.
  • Allows companies to solicit their stock to the public- This offering creates more of a free market to help companies build capital but will rely on investors making smart, informed decisions.

If this bill passes, we will see if this legislation is the answer to a fundamentally changed capital market that will foster job creation.

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