While the SEC continues to delay its review of the JOBS Act, a few changes are anticipated that would have a noticeable impact on SDR and the industry. A recent AxialMarket article breaks down the possibilities:
The JOBS Act may eliminate the general solicitation ban. Instead of only being able to solicit to accredited investors with whom they have an existing relationship, Companies will be able to communicate with any accredited investor through a variety of communication channels. This change will certainly open up new marketing opportunities for investment banks.
While solicitation may become easier, verifying the accreditation of each purchaser may become stricter along with the JOBS Act. The SEC may shore-up due diligence regulations and require additional steps to confirm accredited investors.
An additional change that we may see as a result of the JOBS Act is the ability to crowdfund. Crowdfuning would allow companies to raise up to $1 million in unregistered from non-accredited investors. The SEC has yet to create any specific regulations around the websites that companies would use to raise these funds.
Another expected change is to the existing Regulation A. The new law, known as Regulation A(+), will increase the amount of capital a small company can raise without involving the SEC, from the current $5 million threshold, up to $50 million. This would bring increased opportunities for both new businesses and boutique investment banks, like SDR.
For more information and to read the AxialMarket article, click here.