The Jumpstart Our Business Startups (JOBS) Act, signed into law by President Obama on April 2012, is intended to encourage the growth of small businesses and start-ups by helping with funding and easing federal regulations in order to increase the national employment rate.
A fundamental provision of the JOBS Act is the creation of an emerging growth company, also known as EGC. An EGC is defined as privately held business with less than $1 billion in revenues.
Another major component of the JOBS Act is the integration of “crowd-funding,” which is the process of accepting donations of up to $1 million annually from private individuals or companies in order to help with start-up costs. Some crowdfunding platforms include Kickstarter, Fundable and Indiego.
Additionally, these companies experience relaxed regulations in terms of initial public offerings (IPOs). Under the Small Company Capital Formation Act, passed in 2011, a company can raise up…
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