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On March 27, 2012, the U.S. House of Representatives approved the U.S. Senate version of the Jumpstart Our Business Startups Act or “JOBS Act”. The JOBS Act is expected to be signed by the president in the near future and become law. Whether the JOBS Act stimulates job creation will continue to be a hotly debated issue, but there is little doubt that the JOBS Act makes fundamental changes to the way capital will be raised by a large number of public and private companies. It creates a new paradigm for capital formation for all but the largest companies; one where companies with up to $1 billion in annual revenues will face fewer regulatory requirements when going public, where private offerings can be broadly advertised, and where companies can use the internet and social media to raise up to $1 million every 12 months.
Most significantly, the JOBS Act:
This alert highlights the most significant reforms of the JOBS Act and how these reforms will transform the way in which capital is raised.