Yesterday was another day of positive progress towards investment crowdfunding becoming a reality. Following Tuesday’s Senate hearing on crowdfunding, President Obama and the House of Representatives sent strong signs of support for crowdfunding.
Early yesterday morning, the White House issued a statement in support of H. R. 3606, the Jumpstart Our Business Startups, or JOBS Act. The JOBS Act bundles six bills together, including the previously passed investment crowdfunding proposal, H. R. 2930. Referring to previous signs of support for crowdfunding, the White House statement says, “The President called for cutting the red tape that prevents many rapidly growing startup companies from raising needed capital”, before adding, “The President is encouraged to see that there is common ground between his approach and some of the proposals in H.R. 3606″.
Later in the day, the House passed the JOBS Act 390-23. So in essence, the crowdfunding bill has been passed, again, in the House. Boulder-based Representative Jared Polis called upon the Senate to pass the legislation.
This bill’s not exactly short, so I could well have missed it, but where does this give the green light to crowdfunding? I see references to removing two or three of the several dozen requirements for registering, but didn’t see any clauses that would really help out the company that can’t afford that 10 month, $100,000+ process to ever go beyond 35 investors.
Bill’s text: http://www.gpo.gov/fdsys/pkg/BILLS-112hr3606rh/pdf/BILLS-112hr3606rh.pdf
Also on a side note, am I the only one that feels it’s strange to lump the corner coffee shop in with a company that does $1 billion in revenue? Zynga just recently outgrew this classification, and now their IPO is the big news. I fear this adoption of the term “Emerging Company” in legislation could take the focus away from real “small business”, but still enable VCs to use the ‘small business growth engine’ argument to accelerate activities and perhaps even cash out a few years earlier — potentially with even higher returns.