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Full-Text Articles in Securities Law
Bridgefunding Is Crowdfunding For Startups Across The Private Equity Gap, Seth C. Oranburg
Bridgefunding Is Crowdfunding For Startups Across The Private Equity Gap, Seth C. Oranburg
Seth C Oranburg
Title III of the JOBS Act of 2012, which attempts to encourage entrepreneurship by allowing startups and small business to sell stock to the general public over the Internet through “crowdfunding,” is completely backwards. Its ceiling should be a floor—the $1 million limit should be inverted. By capping startups at raising $1 million from crowdfunding, the JOBS Act does not address the private equity gap, a fundamental problem in startup markets, and exposes unsophisticated investors to risk and fraud. This Article presents a regulatory framework premised on “bridgefunding,” an approach that this article develops to protect new investors by encouraging …
Sec Preventative Measures Against Securities Violations And Fraud Post-Jobs Act, Kristie Benner
Sec Preventative Measures Against Securities Violations And Fraud Post-Jobs Act, Kristie Benner
Kristie Benner
The purpose of the Securities Act and the Exchange Act is to supply investors with the necessary information to make informed decisions regarding an entity’s offerings. After the 2010 financial crisis, the economic crisis devastated the economy leaving many without jobs. In response to this economic recession, President Obama signed the Jumpstart Our Business Startups Act (JOBS Act) into law in 2012 as one method of stimulating the economy. This Act deregulated the securities laws for small businesses in the hopes of creating jobs and invigorating the economy. These changes allow a small business more access to capital by reducing …
The Siren Call Of Equity Crowdfunding, Michael B. Dorff
The Siren Call Of Equity Crowdfunding, Michael B. Dorff
Michael B Dorff
The JOBS Act opened a new frontier in start-up financing, for the first time allowing small companies to sell stock the way Kickstarter and RocketHub have raised donations: on the web, without registration. President Obama promised this novel form of crowdfunding would generate jobs from small businesses while simultaneously opening up exciting new investment opportunities to the middle class. While the new exemption has its critics, their concern has largely been confined to the limited amount of disclosure issuers must provide. They worry that investors will lack the information they need to separate out the Facebooks from the frauds. This …