Crowdfunding the Bill on Capital Hill: One Startup’s JOBS Act Appeal
When Barack Obama signed the JOBS Act back in April, it was a game-changing event in the lives (and future lives) of entrepreneurs and startups across the country. It meant that restrictions on crowdfunding have been lifted and investment in startups and small businesses made exceptionally easier.
A massive win for the small guys.
Here’s the awesome story of Melanie’s march from Durham to DC to make sure her crowdfunding startup would have a better chance of survival.
Motaavi is a crowdfunding platform. According to Melanie, it was born out of frustration from the disconnect between really good ideas and capital.
The startup was all prepped to head across the pond to the UK (where crowdfunding is legal) when the team heard about the JOBS Act being floated around DC. This Act would legalize crowdfunding and keep Motaavi stateside.
So, the team from Durham, North Carolina sent Melanie to Capital Hill as a rep for the startup to make sure this groundbreaking bill had all their support.
The Accidental Lobbyist
When Melanie arrived to DC, she didn’t really have much of a plan of action. She found herself wandering around the Hill, asking people who looked important what she needed to do and whom she needed to talk to about collecting support for the JOBS Act.
“Buy a suit, prepare supporting material and come back ready to fight your case” was the response she got.
And that’s exactly what she did, for five months, and met other startup crusaders from companies like Secondmarket, Gate Technologies and Google’s lobbying force, all fighting for different provisions of the Act, but eventually supporting the causes of fellow techies.
Their efforts were not in vain. On April 5, 2012, President Barack Obama signed the JOBS Act and officially opened up a world of funding opportunities for small businesses and startups.
Breaking Down the Bill
As an entrepreneur you probably know about the JOBS Act, or at the very least have heard of it. Just in case, here is a brief breakdown of why it’s so important:
- It will allow financing for startups via crowdfunding
- Participants can raise as much as $1 million a year without having to do a public offering
- It increased the number of shareholders required for a company to register its common stock with the SEC and become a publicly reporting company
Simply put, the JOBS Act will give startups access to more funding by allowing non-accredited investors to join in on the funding rounds. This will ultimately allow more companies to be founded and theoretically help to jump start the job market.
Crowdfunding For the Win
Melanie, and subsequently Motaavi, came home victorious. But, their efforts haven’t stopped there.
The innovation database was created in collaboration with other accidental tech lobbyists as a resource for lawmakers to have access to info on tech companies and startups all across the country in order to lobby for and continue to support bills affecting tech companies.
Now, Motaavi is in its final stages of platform development and startups will soon be able to build profiles and start reaping the crowdfunding benefits.
If you’re like Melanie, perhaps a little political resolve will see you in a suit fighting in DC for your startup’s rights and coming out on top someday. For now, sit back, relax and enjoy the JOBS Act win.