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What are some of the immediate effects to startups of the recently passed JOBS act?

Chris Barsness,

startup, finance, law, and tech nerd

There won't be many immediate effects for businesses. 

Most of these types of legislation relate to securities laws and the SEC has to promulgate rules to implement the new laws.  For example, crowdfunding will not be set in place until the SEC puts rules on how to register a funding portal and other rules.  They have 270 days to propose and implement those rules. 

Under Title I, emerging growth companies will be allowed to used reduced disclosures for SEC filings, but there is a 180 day period for the SEC to propose rules under Regulation S-K so they may be able to utilize some of the new law, but will not fully take effect until the SEC rules are in effect.   Under Title II that allows general advertising in private placements under Rule 506, the SEC has up to 90 days to implement the rules on how to comply.

The JOBS Act mostly just provides the legal authority for the SEC who regulates securities to implement new rules, so until those rules come into effect, it really won't make too much effect other than people to start prepare for the final implementation over the next 9 months.  There will probably be some websites popping up claiming to be able to raise money through selling stock via crowdfunding, but they probably don't understand that they are not yet protected under the new laws.

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