This Case is about ENTREPRENEURSHIP
PUBLICATION DATE: May 15, 2013 PRODUCT #: BH527-HCB-ENG
On the 5th April, 2012, President Barack Obama signed into decree the Jumpstart Our Business Startups (JOBS) Act, noticeably varying the landscape for numerous corporations lifting up resources. Among the most eye-catching sections of the Act is Title III, the CROWDFUND Act, which enables entrepreneurs and small industry owners to sell limited quantity of equity in their corporation to a large quantity of investors via social networks and a range of Internet platforms.
For all realistic purpose, selling equity interests in businesses via crowdfunding was before the CROWDFUND Act prohibited under United States securities laws.
The JOBS Act and Crowdfunding Harnessing the Power-and Money- Of the Masses case solution
The Act tries to exempt crowdfunding from enrollment demands that are high-priced and let crowdfunding websites to prevent the categorization of brokerage, which may levy significant enrollment prices on such sites. Through the CROWDFUND Act, equity-based crowdfunding has the capacity to open financing opportunities to little businesses and innumerable finance entrepreneurs. Additionally, it can provide new approaches to investors to diversify their portfolios. But, the benefits of crowdfunding do not come without significant hazards. Given the mixture of unsophisticated investors, companies that were fundamentally high-risk, as well as the zeitgeist that altered regulations immediately, crowdfunding has to be approached with caution.