Liz Gannes

Recent Posts by Liz Gannes

SEC Moves Forward on JOBS Act — First Up, Allowing Companies to Ask for Money

The U.S. Securities and Exchange Commission today outlined a proposal for how it will deal with the most pressing requirement of the recent JOBS Act, which President Barack Obama signed in April.

The proposal would relax the ban on what’s called “general solicitation” — that is, asking investors for money in a more public way — as mandated by the JOBS Act. The intent is to allow start-ups, venture capital firms and hedge funds to more easily raise money.

This aspect of the law is a big deal because it’s a step closer to equity-based crowdfunding platforms — companies like CircleUp currently offer a sort of “Kickstarter for start-ups” with lots of restrictions, and many more want to do so more freely.

And it would bring the world of financing into a more public light, as companies could ask for money outside their personal networks.

According to the SEC proposal, the burden is on the fundraisers to ensure that they are advertising only to accredited investors — people who have at least $1 million in assets or make $200,000 per year qualify.

The proposal falls short of an actual rule, which the SEC was supposed to put into place within 90 days of the JOBS Act passing. That’s clearly not happening.

Four commissioners supported the proposal, while one disagreed because of investor protection concerns. Some of the others said they were disappointed that they didn’t already have an actual rule in place by now. The SEC is now seeking comment for the next 30 days.

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The problem with the Billionaire Savior phase of the newspaper collapse has always been that billionaires don’t tend to like the kind of authority-questioning journalism that upsets the status quo.

— Ryan Chittum, writing in the Columbia Journalism Review about the promise of Pierre Omidyar’s new media venture with Glenn Greenwald