Ready your startups, the early stage investing climate is about to go into overdrive. This afternoon, the JOBS Act (or Jumpstart Our Business Startups Act) passed in the House with an overwhelming vote of 380-41. Next, the bill moves to President Obama, who is expected to sign it into law.
It’s been a bit of a bumpy ride. The JOBS Act originally passed in the House a few weeks ago with a 390-23 vote a couple weeks ago. The Senate’s version of the bill, called the CROWDFUND Act (or Capital Raising Online While Deterring Fraud and Unethical Non-Disclosure Act), added a number of safeguards for investors and passed last week 73-26. The JOBS Act was then revised to reconcile with the Senate’s bill, which is why the final version had to move back to the House for another vote.
As the Washington Post reports, President Obama’s support for the bill “has put him at odds with frequent allies, including labor unions and consumer and regulatory groups.” Although the bill has been buoyed by overwhelming support from the tech community, “Critics say that the changes would allow firms to avoid disclosing crucial financial information and elude government oversight, opening the door to fraud and investor abuse,” adds the Post.
We detailed some of the crucial changes the bill will bring about, including increasing the 500-shareholder cap up to 2,000 investors before companies have to disclose their financials and allowing unaccredited investors to contribute limited amounts to small companies via crowdfunding platforms.
For a more thoughtful take on what this means for the startup world from a veteran tech investor, check out Rick Webb’s incisive column from earlier today.
It’s worth noting, however, that Mr. Webb isn’t the only techie with misgivings.
— Om Malik (@om) March 27, 2012
Mr. Winer’s response? Cross your fingers.
— Dave Winer ☮ (@davewiner) March 27, 2012