Understanding the Impact of the JOBS Act on Small Business Financing and Its Benefits for Entrepreneurs.
In 2012, the Jumpstart Our Business Startups (JOBS) Act was signed into law, aiming to make it easier for small businesses to raise capital and grow. The JOBS Act has made a significant impact on the fundraising landscape, as it has provided entrepreneurs with access to new sources of capital and reduced some of the regulatory burden associated with fundraising.
This has led to a greater number of small businesses being able to go public and list on the NASDAQ Capital Markets, a venue that is renowned for its high-tech focus and early-stage company listings.
One of the key provisions of the JOBS Act is Title IV, which created a new exemption to the Securities and Exchange Commission’s (SEC) registration requirements, known as Regulation A+. This exemption allows private companies to raise up to $50 million in a public offering, without having to comply with the full registration and disclosure requirements of a traditional IPO. Companies that use Regulation A+ to raise capital are often referred to as “mini-IPOs.”
ShiftPixy Finds success
Since its introduction, several companies have successfully used Regulation A+ to raise capital and list on the NASDAQ Capital Markets. One of the most notable examples is ShiftPixy (NASDAQ: PIXY), a human capital management platform that connects employers with part-time workers.
ShiftPixy went public in 2017, raising $12 million in a Reg A+ offering. The company’s shares are now traded on the NASDAQ Capital Market, where they have increased in value by over 300% since listing.
Wel all Love feel good content
Another company that has benefited from the JOBS Act is Chicken Soup for the Soul Entertainment (NASDAQ: CSSE), a media company that produces and distributes positive and uplifting video content.
The company went public in 2017, raising $30 million in a Reg A+ offering. Since listing on the NASDAQ Capital Market, the company has seen its share price increase by over 500%.
The success of these companies, and others like them, demonstrates the value of the JOBS Act in enabling everyday entrepreneurs to raise capital and grow their businesses. By providing new sources of capital and reducing regulatory barriers, the Act has opened up new opportunities for small businesses to access the capital they need to succeed.
In conclusion, the JOBS Act has had a profound impact on the fundraising landscape for small businesses, enabling them to raise capital and go public with greater ease. The success stories of companies like ShiftPixy and Chicken Soup for the Soul Entertainment demonstrate the value of the JOBS Act and the benefits it offers to entrepreneurs. With continued support from the SEC and other regulatory bodies, we can expect to see even more small businesses using the JOBS Act to raise capital and achieve their growth objectives.