Press Room

9/19/2013

EquityNet Featured in Mashable

Below is an article by Mashable entitled "The JOBS Act: What Investors Need to Know".

The JOBS Act: What Investors Need to Know
By: Adam Popescu, Mashable
September 19, 2013

On Monday, a new law takes effect that could change the face of startup investing.

The Jumpstart Our Jobs Act (a.k.a. the JOBS Act, which has nothing to do with jobs) is a bill that President Obama has called "game-changing" for its ability to help startups grow, hire and raise funding. Perhaps the most valuable (and least understood) part of the law is how it will alter the rules of startup advertising and investing.

Per the bill, the SEC will lift a 80-year ban on general solicitation of accredited investors (accredited refers to anyone with a net worth of $1 million, annual income of $200,000 for the last two years, or $300,000 combined with their spouse). This means startups can advertise everywhere — from billboards to television commercials.

For most, these changes remain a legal gray area filled with more questions than answers. To help shed some much needed light, here are three key tips for entrepreneurs on the do's and don'ts of the new law.

1. Soliciting Funds

Businesses are free to advertise their funding needs as they see fit. This means "anything from highway billboards, newspaper ads, or crowdfunding platforms," explains Judd Hollas, the CEO of EquityNet, a crowdfunding company that has raised more than $200 million analyzing privately-held businesses and estimating valuations, risk and investment return.

Hollas tells Mashable this advertising change will be a shot in the arm for startups. "Thousands of previously inactive accredited investors will expand the available pool of capital for young businesses," he says.