JOBS Act

"Crowdfunding" generally refers to the use of the Internet by small businesses to raise capital through limited investments from a large number of investors. Under SEC rules, the general public can invest in capital raising by start-up companies. This advisory is designed to help the public understand the crowdfunding rules and processes so they can make informed decisions about the risks and rewards of investing in these early-stage businesses.

On April 5, 2012, President Obama signed into law the Jumpstart Our Business Startups (JOBS) Act. The JOBS Act has facilitated a substantial reduction in the regulatory burden surrounding financing activities for small companies in public and private capital raising transactions.

What does it mean to be an issuer under Title III of the JOBS Act? An issuer is the legal entity that develops, registers, and sells securities on a registered funding portal or broker-dealer.