The On Passage Of The Jobs Act

In 2004, under George W. Bush’s administration, the American Jobs Creation Act was passed. This Act was created with the intent to boost the United States Economy by allowing a corporation with profits overseas one year to repatriate at a noticeably low tax rate. While the corporations did repatriate a sizeable amount of money back into the United States, they used the low tax rate to repurchase their own stock or to pay larger dividends to their shareholders. The tax holiday did cause a large boost in revenue for the United States Treasury. However, the American Jobs Creation Act did not do what is so clearly in its title, it did not create jobs or invest further in the United States. With political changes happening in the White House

Essentially, investors sign up to back a special syndicate lead without knowing about the startup projects they are interesting in.

regulations, which intend to protect the public from the fraudulent conduct of several large companies, represent a considerable burden for smaller companies. According to Kessel (2011) “they are part of the reason that fewer biotech companies are going public and instead selling out to larger companies as a means to provide exits for investors”. It is clear that the SOX act does not provide any provisions or distinction between the small and large cap billion dollar firms, thus making it difficult for small firm’s the acquire the necessary capital they need to establish the required controls and sustain growth (Reidy, 2006). According to the act, public companies both small and large, should comply with the set rules and regulations, which

On the legal front, there are very few hindrances preventing financial services companies from exercising their rights to utilize their resources to offer themselves a market advantage. Moreover, the availability of advanced technologies lends itself to them, whereby they can afford to provide individuals such as Sergei and Dan Spivey the funding that they require in developing the systems that they need for an actionable response to the market’s competitive nature. In this regard, there also appears a need to begin looking at the safeguards that apply to protecting individuals’ intellectual property from the same manipulation evident in the market. In Sergei’s case, the lack of knowledge about the firm’s stance

The platform didn’t employ any rubric or standardized set of rules to determine if an idea of or start-up was worth investing. The company gave the judges freedom to operate as normal, and advised the VC firms to do as they normally do when picking a potential investment.

Implementation of the Jumpstart Our Business Startups (JOBS) act came into existence in April, 2012 where the concept of equity for the backers has been added up. Though, websites like ‘Kickstarter’ do not promote equity, rather only give back “gifts”. The reasons might be plenty, the projects that backers are interested in investing might be a fraud one. One of the examples is the story of a game called ‘Mythic: The Story of Gods and Men’. This was put forth by ‘Little Monster Productions’ which had copied images of an existing game images from a website and showcased them to be theirs in order to raise the funds from the crowd. Kickstarter shut down the project in the right time saving precious funds.

A person with a great conception for a startup business customarily had constrained options when it came to funding. They could borrow from friends and family, a kind investor, rely on their personal fortunes, or in one to million hit a jackpot in the lottery. Then came along Kickstarter, a website for fundraising where individuals can get funding from visitors to the website; the individuals can set a funding goal that is needed for example $2000, and then ask visitors to the website to make contributions towards that goal. One visitor may donate $10 while another might donate up to $1000 if they see good value in it. Kickstarter was started for the individuals and independent that can’t afford giant load, a way for the independent to raise funding for a project that billionaire investors would overlook, some independent project on Kickstarter has raised up to $10 million. But now Kickstarter have attracted attention from celebrities as well, what was once a website design for rinsing funding for the independent individuals is starting to become a handout for celebrities should it stay independent or let celebrities. The management team in Kickstarter handling the celebrity issue can proved change that might help or ruin Kickstarter, since Kickstarter get 5% of the funding.

On October 30, 2015, the Securities and Exchange Commission adopted final rules to permit companies to offer and sell securities through equity crowdfunding for non-accredited investors.

When talking about the aptitude to make or have an impact, investors exhibit interest in crowdfunding as a conduit to make the greatest impact. The goal of equity crowdfunding is to afford SME’s access to capital in new and innovative ways by offering investors opportunities in original products. Crowdfunding exemplifies a low-cost means to raise money from the public. The JOBS Act removed the ban on general solicitation

The downward spiral of the United States economy began in 2007. Initially, banks made careless loans to individuals. Following these careless loans, many couldn’t afford to stay in their homes. The credit crisis was occurring simultaneously with the housing market collapse. The credit crisis occurred when large financial institutions were on the verge of collapsing due to the risky loans issued to United States residents. In order to stabilize the economy, the United States government developed a two-pronged strategy. They would “bailout distressed financial institutions and industries and pump government money into the economy” (“The Great Recession of 2008-09”). Despite the

Crowdfunding is an emerging source of finance for start-ups that involves calling for money from public in general, mainly via Internet for exchange of either equity or product or any other reward or as a means of donation. It focuses on generally small contributions from a large number of people to achieve a targeted financial requirement without involvement of a intermediary.

One of the main issues that crowdfunding campaign will face when targeting B2B is the perception of being a threat. Startup businesses, especially those which branch off from small established businesses, may be seen as trying to overtake the business rather than presenting a solution to a problem of the smaller business. It is paramount that a startup establishes a trust with the smaller established businesses. Present a solution to a problem with the reassurance that the new business is not going to be competitive with the business funding the campaign. A business needs to present that it will benefit the investing business both functionally as well as financially to invest.

What constitutes venture capital and what constitutes angel financing is a natural question. In the time period after the bubble burst in 2000 it became easy to differentiate:

Increasingly, however, I have noticed that a lot of founders are making what I would call “unforced fundraising errors. These are errors they could have avoided that make it more difficult for them to raise money, reducing their chances of getting investor capital or forcing them to take a lower valuation or worse terms than they could have had.

In the years since the 2008/2009 financial crisis, mistrust of the banking and financing industry remains high (Erman, 2013). This provides a unique challenge across the financial sector, including the relevant interior industries of investment banking and venture capital. Once the market crashed and the mechanics behind it came to light, a large portion of the American populace dramatically shifted their opinions in regards to the financial sector. This sentiment came to a head two years after the collapse with the creation of the Occupy Wall Street movement (Erman, 2013). While not the sole cause, pressure from the American public played a part in the increased regulation that the financial sector sees today including the Dodd Frank Act. A large part of this negative backlash was due to an inherent misunderstanding of the inner workings of the financial system (Erman, 2013). However, a lack financial knowledge did not mean the backlash was any less successful.