Issue Date: April 16, 2012
Obama Signs Law To Help Start-Ups
President Barack Obama signed legislation into law that removes regulatory barriers to investment and promises to make it easier for biotechnology companies and other start-up businesses to raise capital. The bill, the Jumpstart Our Business Startups (JOBS) Act, exempts companies with less than $1 billion in annual revenue from certain Securities & Exchange Commission financial disclosure requirements for their first five years on the public market. The provision is expected to save these firms up to $2 million per year in compliance costs. The JOBS Act will also facilitate private fund-raising by making it easier for a small company to go public and giving entrepreneurs the chance to advertise investment opportunities to the general public. In addition, it will broaden the investor base by allowing firms to be financed through “crowdfunding”—that is, using the Internet to sell small amounts of stock to many individuals. This law “will help entrepreneurs raise the capital they need to put Americans back to work and create an economy that’s built to last,” Obama said during a signing ceremony in the White House Rose Garden on April 5.
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