The major thrust of the Jumpstart Our Business Startup campaign and subsequent act lies in the issuance of proposals to provide small-business help for those companies seeking initial public offerings or additional venues for capital. The JOBS Act was expected to bring many new opportunities to workers in 2013, but implementation has been slow, and accountants need to understand how these changes could affect their employers or clients. Two measures that can lead to small-business help were proposed and put into place during the year. A third only saw real proposals at the end of the year, and the last one is still being modified as the SEC seeks feedback on guidelines for crowdfunding in exchange for business equity.
The first of the SEC rules changes providing small-business help under the JOBS Act was the creation of an IPO on-ramp that makes it easier for many smaller companies to make the initial public offering to the stock market. This rule change makes it easier for organizations with less than $1 billion in annual revenue to go public without as many stringent regulatory requirements. Accounting firms and experts benefit greatly from easier regulatory requirements, as it allows them to ensure accuracy with reported and revealed documents and focus their work on making the best possible impression upon IPO launch.
The second major SEC rules change does not affect accounting as much as it does marketing, but it may lead to more revenue and work once capital funds begin to arrive. The change provides small-business help as it allows small companies to raise more money by directly soliciting private investors through advertisements. The ban on advertising made it difficult for many companies of all sizes to get the word out about their offerings and needs, and these changes may offer whole new opportunities for investors and small businesses alike. Accountants who work with investment firms should strive to understand how this change can affect the way their clients gain equity and report transactions.
The third change revolves around rules for crowdfunding. This method of raising revenue is still relatively new in the marketplace, and it is a hotly contested area for many investors and small businesses alike. Current crowdfunding sites and organizations cannot offer equity as a reward for funding, but the rules changes will allow small businesses to accept funds in exchange for equity as long as such transitions occur through registered providers. This offers small-business help for companies by freeing up an entirely new set of resources, but the rules are still in the proposal stage.
Accounting experts need to understand the SEC changes whether they are looking to help bring their companies to the public or they work for organizations still at the startup level. The JOBS Act provides small-business help to many companies and future changes proposed by the SEC could help ensure additional funding options in the years to come.
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