April 05, 2012

Mike Abbott Assesses Implications of JOBS Act for Startups

The bipartisan JOBS Act, passed by Congress in April 2012, provides privately held startup companies with a new avenue for seeking investment capital from the public, the Des Moines Register reported in the article, "JOBS Act Gives Boost to Startups."

The law introduces crowdfunding, which allows companies to raise up to $1 million in a 12-month period by selling securities to the public. The Securities and Exchange Commission has 90 days from passage of the law to create regulations governing crowdfunding, and Mike Abbott of Faegre Baker Daniels advises startups to monitor the SEC rules when they are released.

"They should be aware of it because it will provide them with a new source of capital," Abbott told the Register. "If they need some extra money that could finish testing product or to get some sort of approval, this could put them over the hurdle."

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