[authors: Jacob D. Babcock, Christopher C. Cain, Terry D. Nelson, Mark T. Plichta, Kevin M. Shuler]

On April 5, 2012, President Obama signed the Jumpstart Our Business Startups (JOBS) Act into law. The JOBS Act seeks to reduce securities law burdens on start-ups and small businesses to make capital more accessible. In a statement preceding the signing ceremony, President Obama stated, “America’s high-growth entrepreneurs and small businesses play a vital role in creating jobs and growing the economy. I’m pleased Congress took bipartisan action to pass this bill. These proposals will help entrepreneurs raise the capital they need to put Americans back to work and create an economy that’s built to last.”

Both political parties supported the JOBS Act as a way to ease the burden on smaller companies looking to obtain capital from public and private sources. The JOBS Act seeks to facilitate growth in IPOs through a special IPO process and scalable disclosure requirements for smaller companies, while other provisions streamline current regulations pertaining to exempt offerings. Not all JOBS Act changes take effect immediately, as the SEC must implement certain regulations. When fully implemented, the provisions should provide companies with greater flexibility in seeking capital from investors.