In perhaps the biggest change to hit small business fundraising in the last 80 years, the Securities and Exchange Commission voted on Friday to enact the final rules of the Jumpstart Our Business Startups (JOBS) Act, which President Obama signed into law in 2012.
The new rule, known as Title III, will allow you to access a wider pool of investors than ever before–for instance, family, friends and other interested parties who may not be Rockefellers. It will also unleash the nascent equity crowdfunding industry to become more important gatekeepers of small business financing.
Title III–conceivably the most important part of the JOBS act, at least as far as startups go–allows unaccredited investors to buy into private companies, including startups and other small businesses. These companies can also start publicizing investing opportunities; this hasn’t been legal since before the Great Depression. While Title III was meant to help businesses raise money as banks pulled in and stopped lending in the aftermath of the financial crisis, the section got held up for years as the SEC tried to figure out the best way to protect investors and businesses from potentially reckless speculation.