|Understanding the newly passed Jumpstart Our Business Startups Act (JOBS Act) can be challenging. The JOBS Act is designed to invigorate the capital markets by removing restrictions on capital raising. Gunster’s Emerging Growth Companies Task Force has a robust understanding of the legislation, its impact on public and private businesses and its intended impact on our economy. Gunster’s Task Force is comprised of experienced attorneys from a cross-section of disciplines throughout the firm, including securities, banking, and technology practices. Led by David Scileppi and Bob White, Gunster’s Task Force is a valuable resource to private companies who are looking to raise capital under these newly relaxed regulations. Key components of the JOBS Act:
- Permits “crowd funding” (raising capital in small amounts from many people usually via the Internet to finance a start up);
- Allows for public solicitation of investors (via advertising or other means) by companies seeking financing in a private offering;
- Raises the offering ceiling for so called “Regulation A Offerings” from $5 million to $50 million;
- Raises the threshold for required registration as a public company and for community banks from 500 to 2,000 shareholders (1,500 of whom must be “accredited investors” under the Regulation D standard), thus allowing some public companies to go private and alleviate the pressure of private companies to go public before they are ready.
- Creates a new category of securities issuer called an “emerging growth company,” defined as companies with annual gross revenues of less than $1 billion; and
- Provides for a “securities on-ramp” to phase in costly SEC reporting and compliance requirements such as internal controls audits, Say-On-Pay votes , and certain newly adopted accounting rules over a five-year period for “emerging growth companies”.
These significant changes to securities laws fundamentally affect the way companies raise capital by reversing some of the most overburdensome regulations. Please contact Gunster’s Task Force leaders to learn more about this Act and how it could potentially benefit your business.
Read the Division of Corporation Finance’s Frequently Asked Questions and the Division of Trading and Markets’ FAQs relating to crowdfunding intermediaries.
Listen to PODCAST now: David Scileppi on TheCorporateCounsel.net’s Inside Trac with Broc: Deregistration under the JOBS Act (5/4/12).
Task Force Leaders:
David C. Scileppi
P: (954) 713-6433
P: (954) 667-3720
JOBS Act: Special Summary White Paper