It's coming up on the anniversary of the President's signing of the JOBS Act in the White House Rose Garden.
In the year since, we've gained some perspective on just how much impact some of the securities law reforms under the Act will have. Some reforms, not others.
The reform most lauded by the VC community, the IPO on-ramp of Title I, earns disparate grades from securities lawyers I know who have clients who have taken advantage of it. (None of my clients have gone public in the last year.) One thinks it has made a big difference and cites examples. Another asserts it has made no difference at all, other than to possibly encourage companies to proceed before they or the market are ready, and give them cover to dial back and quietly withdraw from the process outside public view.
The impact of the JOBS Act on private capital formation from accredited investors? That's a different story. The impact of the Act has been immediate, and profound. It may be that the category will be more aptly described by some variation of the phrase, "public, unregistered capital formation from accredited investors."
There will be rear guard actions.
NASAA Will continue to press an agenda that is hostile to Rule 506 and to what they perceive to be the too-permissive breadth of the accredited investor definition.
Remember, too, that Dood-Frank mandated that the GAO undertake a study and report back to Congress with recommendations on adjusting the thresholds for, or otherwise modifying, the accredited investor standard.
And the recent SEC staff FAQ on the meaning of the phrase "compensation in connection the purchase or sale" of securities, pertinent to the federal broker-dealer registration exemption that really buttresses the legal positioning of angel crowdfunding platforms, is problematic and will need to be addressed or worked through.
But we do already know that the JOBS Act has opened the way to network, socially, those millions of Americans to meet the accredited investor standard. They will be able to participate in financing the entrepreneurial economy.
Brief aside for a couple of personal, philosophical observations: (1) this "small 'd'" democratic development is progressive, an expansion or reassertion of the kind of freedom Americans first asserted against the British Crown in the 18th Century; and (2) this development may have positive impacts on job growth.
The past week has also seen the publication of three seminal blog posts which gather what we know or can see about the present and future state of accredited crowdfunding. They are:
If you are new to this blog, read those three posts and you will have a clear view of what's happening.