Last week saw overwhelming bipartisan support from the House of Representatives for the JOBS Act, a bill that would help small businesses raise capital. The bill passed 390-23 in the House and is now being debated in the Senate for a vote tomorrow. Unfortunately, the momentum coming out of the House is slowing as activists and union leaders rally support against the bill.
The JOBS Act includes two major elements:
- It would make it less onerous for companies with less than $1 billion in revenue to go public, and
- It would allow companies to raise up to $2 million in capital by soliciting small investments from many individuals (crowd-funding).
Both of these reforms are critical to encourage more capital to flow into young, innovative companies. Importantly, the JOBS Act accomplishes this within the context of the current regulatory structure, not outside it. The fundamental premise of the JOBS Act, as Harvard Business School professor, Bill Sahlman, has explained, is that the benefit of having more new companies formed and able to go public outweighs the potential costs of isolated bad behavior.
Please get involved and communicate your support for the JOBS Act today. The National Venture Capital Association has a page which allows you to sign a letter to the Senator of one of ten states where a senator’s vote could make a difference in the bill’s outcome.