JOBS Act a Small Step in Right Direction
The Senate passed the JOBS (Jumpstart Our Business Startups) Act, H.R. 3606 and President Obama is likely to sign it. The goal of the legislation is to reduce some of the regulatory burdens in raising capital for startups. The Act exempts small firms from Section 404 of the Sarbanes-Oxley Act for up to five years according to Wikipedia. It also includes some of the crowdfunding ideas of HR 2930. This legislation is a positive step in the right direction. Unfortunately, it is a pebble in Sea of laws, regulations, and taxes strangling technology startups in the US. My guess is that the reason this legislation is passing has little to do with what is good for the country, but what is good for Wall Street banks.
In my book The Decline and Fall of the American Entrepreneur I show that every academic study of the effectiveness of our Securities Laws shows that they have been either totally ineffective at protecting investors or worse counterproductive. The real answer to the lack of funding for start-ups would be to repeal all Securities Laws and Regulations except the common law requirements under contract and tort law.
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