This Act, passed in 2012, is intended to facilitate "emerging
growth companies" (EGCs), defined as firms with $1 billion or less
in annual revenues, to raise capital and conduct initial public
offerings (IPOs). The key provision of the Act authorizes crowdfunding,
which uses the Internet and related social media to offer and sell
a company's stock to investors. The Act limits companies to raising
money by these methods to (1) $1 million a year or (2) $2 million,
if the company provides investors with audited financial statements.
Opponents of the JOBS Act assert that it guts much-needed investor
protections by legalizing what are essentially "boiler room" operations
(i.e., operations that sell questionable investments by telephone,
often using dishonest sales tactics, and at times committing outright
fraud). See also
Initial public offering.
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