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The JOBS Act and Its Implications on Capital Raising for Startup Companies

// Brian Y. Choi

September 18, 2013 - On April 5, 2012, President Obama signed into law the Jumpstart Our Business Startups Act (the “JOBS Act”). The primary intent of the JOBS Act is to drive job creation by making a number of significant changes to federal securities laws which shall facilitate startups and other emerging growth companies raising capital. In addition to changes which ease restrictions placed on private placement offerings and Securities Exchange Commission (“SEC”) shareholder registrations, the most highly anticipated provisions of the JOBS Act is the enablement of “crowdfunding,” or the ability to sell securities in small amounts to a large number of investors.  The changes brought by the JOBS Act will likely have a significant impact on how startups raise capital.
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