The JOBS Act, short for Jumpstart Our Business Startups, was an act signed into law by President Obama in 2012. The JOBS act was designed to encourage startups and support small businesses, and Acts I through VII became effective at different times over the past few years.
Only Title II and Title III have relevance to equity crowdfunding. (For a brief overview of the other titles, see our Crowdfunding White Paper.)
Title II relates to “Access to Capital for Job Creators.” The goal of this title was to provide startups with more access to capital by allowing them to solicit an offering to accredited investors without broker-dealer registration.
Title III relates to “Crowdfunding.” It allows startups to access funds through broker-dealers or funding portal websites. This title also allows non-accredited investors to invest in startups via crowdfunding, but it sets caps on the amount that can be invested. And investor with an annual income or net worth under $100,000 can only invest the greater of $2,000 or 5% of his or her annual income or net worth. If both annual income and net worth are greater than $100,000, the investor can invest 10% of the lesser of the two.1