Private financing hasn’t been easy for small- to mid-sized companies in the past 15 years. Ever since Enron and Sarbanes-Oxley (SOX), regulations and associated fees have crippled the ability of startups to source money by severely limiting their options to do so.
The Jumpstart Our Business Startups (JOBS) Act, however, aims to reverse this by basically making it easier for small investors and small companies to connect without the prior regulatory hoops to jump through.
Essentially, as an individual investor now you can become an early shareholder in a private company you have confidence in. Before, your only window for investment was the IPO (unless you are an accredited investor). But now you have an earlier opportunity to get in at the ground floor, ahead of lofty valuations.
We won’t go into exhaustive detail here, but we did find this infographic helpful, especially for those seeking a clearer picture of how the JOBS Act and by extension crowdsourcing will transform how startups raise money. Click here to view the crowdfunding infographic fullscreen.
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