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.