Jumpstart Our Business Startups Act - JOBS

DEFINITION of 'Jumpstart Our Business Startups Act - JOBS'

An act signed into law on April 5, 2012 that allays the regulations instituted by the Securities And Exchange Commission on small businesses. The Jumpstart Our Business Startups Act, or JOBS Act, loosens restrictions on capital raising for small businesses, such as allowing them to go public with less than $1 billion in annual gross revenue and giving more legitimacy to the practice of crowd-funding (where firms can solicit publicly for investments.)

BREAKING DOWN 'Jumpstart Our Business Startups Act - JOBS'

The JOBS Act is geared towards allowing firms with potentially innovative ideas to hit the ground running without the obstacle of strict regulatory requirements. However, given the loosening of restrictions, along with allowing for new sources of capital raising, it comes with new provisions protecting potential investors, such as requiring startups utilizing crowd-funding to register with the SEC and provide information on their financial health and risks.

RELATED TERMS
  1. Crowdfunding

    The use of small amounts of capital from a large number of individuals ...
  2. Investment Crowdfunding

    Investment crowdfunding is a way to source money for a company ...
  3. SEC Form N-5

    A filing with the Securities and Exchange Commission (SEC) required ...
  4. Startup Capital

    Startup capital refers to the money that is required to start ...
  5. Investment Company Act Of 1940

    Created in 1940 through an act of Congress, this piece of legislation ...
  6. Series B Financing

    The second round of financing for a business by private equity ...
Related Articles
  1. Markets

    Understand the SEC Rules on Equity Crowdfunding

    The SEC's adoption of equity crowdfunding rules, initiated under the JOBS Act, enables small investors to invest in companies that show early potential.
  2. Managing Wealth

    Crowdfunding: Wide Opening For Tech Investors

    Crowdfunding has dramatically changed investing and opened the door for the public to get in on all types of exciting startups, including tech firms.
  3. Financial Advisor

    Crowdfunding: What Advisors and Clients Must Know

    Now even the most elementary investor can take a stake in a startup via a crowdfuding platform. Does that mean they should?
  4. Managing Wealth

    A Guide to Building a Portfolio with Crowdfunded Investments

    Crowdfunding has moved beyond fundraising for personal projects and it now represents a new frontier for beginning and seasoned investors alike.
  5. Personal Finance

    Crowdfunding Rule Lets Anyone Invest in Startups

    As of Monday, a belated provision of the 2012 JOBS Act goes into effect, allowing anyone and everyone to participate in fundraising for private companies and receive stakes in potentially high-growth ...
  6. Entrepreneurship & Small Business

    Equity Crowdfunding Sites Disrupt Banking and VC

    Equity crowdfunding is poised to revolutionize the way companies are funded and disrupt the traditional private equity, banking and venture capital industries.
  7. Managing Wealth

    Angel Investing vs. Crowdfunding: How to Raise Money for Your Startup?

    Angel investing and crowdfunding are two very different options startups can use to get the funding they need.
  8. Financial Advisor

    Invest through Equity Crowdfunding: Risks and Rewards

    Investing through equity crowdfunding carries risks such as risk of failure, fraud and doubtful returns. But it also offer a number of rewards.
  9. Markets

    New Avenues For Bitcoin Funding Opened Up By SEC

    Could New SEC Regulations Pave the Way for Investing in Bitcoin Startups?
  10. Entrepreneurship & Small Business

    Non-Accredited Investors: Make Money in Crowdfunded Investments

    The JOBS Act will soon afford non-accredited investors the opportunity to participate in crowdfunded investments under recently finalized Title III rules.
RELATED FAQS
  1. What is real estate crowdfunding?

    Invest directly in real estate projects through crowdfunding. Currently only open for accredited investors, the SEC is working ... Read Answer >>
  2. What resources are available to an entrepreneur to raise capital?

    Learn how entrepreneurs can use various resources to raise capital and how each is beneficial throughout the different phases ... Read Answer >>
  3. What exactly is a startup?

    A startup is a young company that is just beginning to develop. Startups are usually small and initially financed and operated ... Read Answer >>
  4. How important is sustainable growth for the long-term future of a startup?

    Understand the importance of sustainable growth to the long-term future of a startup. Learn the benefits and drawbacks of ... Read Answer >>
  5. In the context of a startup, what is sustainable growth?

    Understand what sustainable growth means for a startup. Learn what a startup needs to do if its growth rate is above or below ... Read Answer >>
  6. What is the best form of equity financing for a start-up company?

    Learn the equity financing options available to small business, and understand the best equity options for companies during ... Read Answer >>
Hot Definitions
  1. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  2. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  3. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  4. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  5. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
  6. Russell 3000 Index

    A market capitalization weighted equity index maintained by the Russell Investment Group that seeks to be a benchmark of ...
Trading Center