WASHINGTON — President Obama signed a bipartisan bill into law Thursday that he said would allow start-up companies and businesses to tap into a “big pool of investors – the American people.”
The Jobs Act reduces the amount needed to invest in a new business, using a concept called “crowdfunding.” It allows a person who earns as little as $50,000 a year to invest as much as $500 annually. Also, the law extends the number of years that companies have until they comply with SEC auditing requirements and requires companies to disclose their financial condition, business plan, and potential conflicts of interests.
The latter provision was co-sponsored by Sen. Michael Bennet (D-Colorado). “The crowdfunding measure will help bring our securities regulations into the 21st century while still maintaining the level of protection that investors expect and deserve,” he said in a statement.
At a Rose Garden ceremony outside the White House, Obama was flanked by 15 lawmakers and business leaders, including Dan Caruso, the president and CEO of Zayo Group, a Louisville, Co.-based Internet network operator.
The extent to which the law will help “emerging growth” companies like Zayo Group and spur job creation has been an unstated point of dispute. Since the Senate passed the legislation March 22, many Western Democrats have suggested the bill could revive entrepreneurship and Main Street’s economic fortunes.
“This law will drive innovation, promote job growth and support small businesses in a way we have not seen before,” Bennet said in his statement. “Colorado is rich with entrepreneurial and innovative spirit, and our entrepreneurs need access to capital to help our economy get back on track and create jobs.”
“For start-ups and small businesses, this bill is a potential game changer,” Obama said. “Right now, you can only turn to a limited group of investors, including banks and wealthy individuals, to get funding. Laws that are nearly eight decades old make it impossible for others to invest. But a lot has changed in 80 years, and it’s time our laws did as well.”
The bold predictions contrasted with Bennet’s statement before the bill passed that the legislation was “not a huge step” toward economic recovery. House Majority Leader Eric Cantor (R-Va.) struck a similarly cautious note after the bill-signing ceremony, saying the law “addresses” the over-regulation that small and start-up businesses face.
While Democrats and Republicans disagree on the law’s impact, they basked in the bipartisan hue of the Rose Garden ceremony.
Cantor stood directly behind Obama as he used one of 11 pens to sign the legislation into law. Obama said the bill “represents exactly the kind of bipartisan action we should be taking in Washington to help our economy.”