Last night President Obama delivered a speech to the nation in front of both houses of Congress. During his speech he laid out his plan to create jobs and jumpstart our economy.
He had the following to say: “Everyone here knows that small businesses are where most new jobs begin. And while corporate profits have come roaring back smaller companies haven’t.” “Ultimately our recovery will be driven not by Washington but our businesses and our workers. We can help.” “I agree there are some rules and regulations that do put an unnecessary burden on businesses at a time when they can least afford it.” So “we are … planning to cut away the red tape that prevents too many rapidly growing startup companies from raising capital and going public.” “We should have no more regulation than the health, safety and security of the American people required. And every rule should meet that commonsense test.” “We should be in a race to the top and I believe we can win that race.” “And it has been the drive and initiative of our workers and entrepreneurs that has made this economy the engine and envy of the world.” “Members of congress it is time for us to meet our responsibilities”
Today his Jobs Act was released with the following paragraph pursuant to his speech.
Reducing Regulatory Burdens on Small Business Capital Formation: As part of the President’s Startup America initiative, the Administration will pursue efforts to reduce the regulatory burdens on small business capital formation in ways that are consistent with investor protection. This includes working with the SEC to explore ways to address the costs that small and new firms face in complying with Sarbanes-Oxley disclosure and auditing requirements. The administration also supports establishing a “crowdfunding” exemption from SEC registration requirements for firms raising less than $1 million (with individual investments limited to $10,000 or 10% of investors’ annual income) …. This will make it easier for entrepreneurs to raise capital and create jobs.
The bolded line comes directly from what the Startup Exemption has been advocating within its networks in Washington, DC! Sherwood Neiss, the entrepreneur and Chief Advocate for the Startup Exemption said, “It is AMAZING to see Washington come together over this issue. Crowdfund Investing (CFI) is an AMERICAN opportunity. It has the ability to get capital flowing to our nation’s struggling entrepreneurs so that they can grow and hire. Our zero-cost government initiative has the ability to create over 500,000 companies and 1.5M net new jobs over the next 5 years.”
President Obama is pushing congress to enact the Jobs Act. If passed, the crowdfunding changes advocated by the Startup Exemption will be the first changes to the security laws in the past 20 years.