Amidst Employment Anxiety, Are the JOBS Act Haters Justified?
NEW YORK (MainStreet) --The first anniversary of the Jumpstart Our Business Startups (JOBS) Act brought unbridled criticism of its shortcomings, but those defending the initiative say it's still too early to appraise and, as the case may be, condemn. After all, the august plan to allow companies engaged in private offerings to solicit funds publicly has had no implementation from the Securities and Exchange Commission (SEC) on two main parts--Title II, which allows general solicitation of accredited investors, and Title III, which allows for the solicitation of non-accredited investors.
That's not stopping the population from passing judgment.
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Americans largely feel the JOBS Act has had minimal impact to date, according to a GfK Roper Survey conducted on behalf of MainStreet. Just over 30% of survey respondents were aware of the JOBS Act. Of those, more than 60%, regardless of region, felt that the JOBS Act hadn't improved employment rates in their region. That judgement was issued most harshly in the Northeast where only 8% said the JOBS Act had even moderate success in creating employment opportunities, compared to those in the West (36%), Midwest (36%) and South (34%). That might be in part because the Western region had the highest percentage of residents who felt unemployment had fallen (36%) compared to those the Midwest (34%), the South (31%) and the Northeast (30%).
Ryan Feit, the co-founder and CEO of SeedInvest, said his equity crowdfunding platform has thrived as a result of the passing of the JOBS Act last year. SeedInvest launched in February and has since helped two startup companies meet their funding needs--car-summoning app company Stearclear, which raised $140,000 in less than a week and social dieting platform Dietbet, which raised $308,000 with investors giving between $5,000 and $50,000. SeedInvest has already attracted nearly 450 accredited investors pledging to invest more than $25 million per deal on the platform and several other companies actively raising capital.
JOBS Act supporters insist the initiative is more than just a good idea and could help round-up the crowd-sourced funds to launch more promising businesses.
"The underlying rationale behind the JOBS Act--as long as it doesn't get screwed up--is incredibly powerful and necessary for our country right now," Feit said. "Innovation and jobs are at stake with the JOBS Act. The fact that it's taking so long is frustrating, but it's not a secret that raising capital is an antiquated process."