Jumpstart Our Business Startups Act JOBS

Jumpstart Our Business Startups (JOBS) 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).

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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).