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| Jobs Act | |
|---|---|
| Name | Jumpstart Our Business Startups Act |
| Enacted by | 112th United States Congress |
| Effective date | April 5, 2012 |
| Signed by | Barack Obama |
| Public law | Public Law 112–106 |
| Citations | 126 Stat. 306 |
Jobs Act
The Jumpstart Our Business Startups Act, enacted by the 112th United States Congress and signed by Barack Obama, aimed to stimulate capital formation for small businesses and startups by amending securities regulation under statutes such as the Securities Act of 1933 and the Securities Exchange Act of 1934. The law sought to expand access to capital through mechanisms including crowdfunding, exempt securities offerings, and revisions to registration requirements, affecting stakeholders from venture capital firms like Sequoia Capital and Benchmark (venture capital firm) to regulatory agencies such as the U.S. Securities and Exchange Commission and market venues including the New York Stock Exchange and NASDAQ. Major industry participants—entrepreneurial firms related to Silicon Valley and financial institutions like Goldman Sachs and Morgan Stanley—responded alongside advocacy groups such as the Small Business Administration and Chamber of Commerce of the United States.
The legislative push originated in bipartisan initiatives involving lawmakers from committees including the United States House Committee on Financial Services and the United States Senate Committee on Banking, Housing, and Urban Affairs, with sponsors and supporters including members of the Republican Party (United States) and the Democratic Party (United States). The legislative text incorporated input from policy organizations such as the Brookings Institution, the Heritage Foundation, and advocacy groups such as American Legislative Exchange Council and National Venture Capital Association. Congressional hearings featured testimony from representatives of Silicon Valley Bank, Y Combinator, and entrepreneurs affiliated with AngelList, and followed debates on precedents including the Sarbanes–Oxley Act and the Dodd–Frank Wall Street Reform and Consumer Protection Act. The bill proceeded through committee markups, floor votes in the United States House of Representatives and United States Senate, and was enacted as Public Law 112–106.
Key statutory changes reformed exemptions and registration under the Securities Act of 1933 and the Securities Exchange Act of 1934. Title II lifted general solicitation prohibitions for certain accredited investor offerings involving firms such as Andreessen Horowitz and Kleiner Perkins, while Title III created a regulatory framework for equity crowdfunding platforms involving intermediaries similar to Kickstarter and Indiegogo but under SEC oversight. Title IV expanded the Regulation A exemption—often referred to as "Reg A+"—permitting offerings to nonaccredited investors and involving broker-dealers and portals with parallels to Renaissance Capital and Crowdfunder. Title V adjusted provisions related to capital formation for emerging growth companies, drawing interest from public markets including the NASDAQ and the New York Stock Exchange, and affecting filings with the U.S. Securities and Exchange Commission. Other titles involved changes impacting municipal securities participants such as Municipal Securities Rulemaking Board stakeholders and advisers like Ernst & Young and PricewaterhouseCoopers.
Implementation required rulemaking by the U.S. Securities and Exchange Commission, which issued guidance and rules influenced by interpretive filings, no-action letters, and stakeholder letters from entities including Public Company Accounting Oversight Board, Financial Industry Regulatory Authority, and state regulators such as officials from California Department of Business Oversight. The SEC adopted rules addressing Form C disclosures, intermediary registration, investor limits, and ongoing reporting for crowdfunding offerings, coordinating with enforcement priorities of the U.S. Attorney General and agencies such as Federal Bureau of Investigation for fraud prevention. Technical standards referenced filings with the Public Company Accounting Oversight Board and reporting frameworks used by firms like Dropbox (service) and Square, Inc. when considering public entry. The SEC periodically issued interpretive releases and compliance FAQs responding to submissions from law firms including Skadden, Arps, Slate, Meagher & Flom and Sullivan & Cromwell.
Empirical studies from academic institutions like Harvard Business School, Stanford Graduate School of Business, and think tanks such as the Kauffman Foundation examined effects on startup financing, initial public offerings by firms like Twitter and Facebook, and venture capital ecosystems involving Accel Partners and Bessemer Venture Partners. Analyses assessed capital flows through crowdfunding portals analogous to SeedInvest and WeFunder, liquidity outcomes on exchanges including the New York Stock Exchange and NASDAQ, and angel investment patterns linked to groups such as Tech Coast Angels and Band of Angels. Macro-financial commentators at outlets referencing data from Federal Reserve databases and research from National Bureau of Economic Research evaluated employment, innovation metrics, and market efficiency, while market participants including BlackRock and Vanguard monitored secondary market implications.
Critics including scholars from Columbia Law School and University of Chicago highlighted concerns about investor protection, disclosure burdens, and potential for fraud, citing enforcement cases brought by the U.S. Securities and Exchange Commission and litigation in federal courts such as the United States District Court for the Southern District of New York. Industry commentators from The Wall Street Journal, The New York Times, and Financial Times debated impacts on incumbent financial institutions including JPMorgan Chase and Bank of America. Advocacy organizations such as Public Citizen and Consumer Federation of America raised issues about risk communication for retail investors, while legal scholars at institutions like Yale Law School proposed alternative regulatory calibrations. Debates also considered the role of secondary trading platforms, state-level securities regulators including the North American Securities Administrators Association, and international comparisons with regimes like the United Kingdom's crowdfunding rules.
Subsequent statutory and regulatory adjustments involved rule changes by the U.S. Securities and Exchange Commission and legislative measures considered in the 113th United States Congress and later sessions, with proposals referencing precedents such as Regulation D (SEC) and Regulation A (SEC). Related legislative efforts included bills introduced by members of the United States House Committee on Financial Services and the United States Senate Committee on Banking, Housing, and Urban Affairs to refine exemptions, address accreditation standards discussed by think tanks like the Brookings Institution, and coordinate with tax treatment considerations involving the Internal Revenue Service. Industry groups such as the National Venture Capital Association and legal practitioners from firms including Latham & Watkins continue to influence policy evolution.