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Title III of the JOBS Act Underway: Everything You Need to Know

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Title III of the JOBS Act Underway: Everything You Need to Know

By Startup Valley (422 words)
Posted in Equity Crowdfunding on January 21, 2014

There are (1) comments permalink

The crowdfunding revolution has democratized the once exclusive realm of capital investment, and the Jumpstart Our Business Startups Act, better known as the JOBS Act, has established regulations to further level the playing field.

Title III of the JOBS Act, which is projected to be fully implemented in the late spring or early summer of 2014, will finally allow non-accredited investors to support new startups. Platforms such as StartupValley are already allowing aspiring entrepreneurs to pitch their projects so the new class of investors can start investing as soon as regulations are finalized.

How Will Title III Affect Investment and Entrepreneurship?

Traditionally, being wealthy has been a prerequisite for investing in private companies. Title III will lower the financial barriers to investment, resulting in increased opportunity and mobility for everyone.

First time business owners almost always rely on small financial contributions from family members and their personal or professional networks. Title III will now open avenues for attracting newcomers to the world of small capital investment.

How Will Title III Affect the Economy as a Whole?

Venture capitalism is a $30 billion industry restricted to a small class of wealthy investors; however, the total investments of millions of potential small investors could make the market grow tenfold according to some economists’ predictions.

What are the Specifics of Title III?

  • Under Title III, anyone with an income below $100,000 may invest up to $2,000 or 5 percent (whichever is greater) in a given year.
  • For individuals who make more than $100,000 a year, the annual cap rises to 10% (not to exceed $100,000).
  • Investments cannot be resold until one year has passed since the initial transaction.
  • Businesses may raise up to $1 million every 12 months from small investors.
  • Businesses that look for Title III investments will have to disclose their financial statements and use of proceeds to potential investors.
  • Businesses must also make public all information about their founders and principals, in addition to anyone who owns 20 percent or greater of the company's assets.

The time to consider new avenues for investing and funding startups is now. Title III is the next step in the crowdfunding phenomenon that is innovating the way people think about establishing sustainable businesses. With funding portals like StartupValley already prepared for investors and entrepreneurs to start working together, the new regulations will hopefully see quick benefits for all Americans.

Comments (1)

Ironman posted on: January 21, 2014

Great, simple explanation of Crowdfunding

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