Corporate Development Capital, LLC

The Rocky Mountain Region’s Investment Bank

10-YEAR ANNIVERSAY

JOBS Act Funding and Corporate Development Capital

With the passage on March 27 of the JOBS Act, capitalization of small companies may become easier and Corporate Development Capital has made this a new area of focus for its investment banking activities. CDC is developing new fund raising techniques and markets, and plans to be ready to launch the program when the final rules are released by the Securities and Exchange Commission (“SEC”).

Now is the time for companies to begin looking at Reg D offerings that will be possible under the new laws and the new SEC rules. CDC welcomes inquiries and conversations with any companies that could benefit from the law changes. Please contact one of the CDC Managing Directors for a free confidential analysis of your company's needs.

From a story by Brett LoGuirato at the Business Insider: www.businessinsider.com

The JOBS Act: Here Are The Major Points Of The New Law

Finally, Republicans and Democrats actually overwhelmingly agree on something - the JOBS Act - the Jump start Our Business Startups, which Obama is expected to sign soon.

“The bipartisan JOBS Act represents an increasingly rare legislative victory in Washington where both sides seized the opportunity to work together, improved the bill and passed it with strong bipartisan support”€ House Majority Leader Eric Cantor (R-Va.) said in a statement after the bill passed the House.

So what's in it?

The JOBS Act is made up of six bills neatly tied together that both parties think will help companies through a quicker, easier transition to go public and raise money.

1. The Private Company Flexibility and Growth Act would allow small companies to increase their number of shareholders from 500 to 1,000. Under old regulations from the 1960’s, small businesses were pushed into filing with the SEC when they had 499 shareholders and $10 million in assets, which ruffled the feathers of lawmakers. Cantor said it “severely limits the growth stage”€ for small business that need time to develop.

2. The Entrepreneur Access to Capital Act loosens SEC regulations that prevent “crowdfunding”€ Through this measure, small businesses could gain revenue from pools of up to $2 million from a number of small investors.

3. The Small Company Capital Formation Act is the provision that makes it easier for small businesses to go public. It increases the ceiling for companies exempt from $5 million to $50 million. In theory, this would promote more investment in the companies and create more jobs.

4. The Access to Capital for Job Creators Act allows companies to use advertisements to solicit investors, which was previously banned under an SEC regulation. Cantor said that regulation limited the pool of potential investors, inhibiting small companies’ ability to create jobs.

5. The Reopening American Capital Markets to Emerging Growth Companies Act reduces the cost of going public. This makes it easier for companies to go public sooner, something that should directly lead to greater job creation. This provision also creates the category of An Emerging Growth Company,€ which helps small companies stave off the bulk of SEC regulations and fees in the first few years of being public.

6. The Capital Expansion Act increases the number of shareholders investing in a community bank from 500 to 2,000.

Other information about the JOBS Act can be found at the following links:

SEC

Morrison Foersterlaw firm

 

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