JOBS Act Heralds New Era for Startup and Emerging Growth Company Financing

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JOBS Act Heralds New Era for Startup and Emerging Growth Company Financing

As forecast, on March 27 the U.S. House of Representatives passed the Senate’s amended version of the Jumpstart Our Business Startups Act (the JOBS Act), clearing the way for President Obama to sign the bill into law, which he is expected to do in the coming days. The JOBS Act’s stated purpose is to spur job creation and economic growth by improving access to capital for emerging growth companies by making some of the most significant changes to the U.S. securities law landscape in over a generation, including by: relaxing the 500 stockholder threshold for the Securities and Exchange Act of 1934 registration requirement; providing for a streamlined IPO process and reduced securities compliance requirements for a new category of “Emerging Growth Companies;” and significantly expanding exemptions for unregistered offerings of securities by private companies, including by creating a new “crowdfunding” exemption.

Some of these changes also have implications for private investment companies. Read the full story here.