Upcoming IPO on Track despite SEC delays on the JOBS Act

More delays in the rule making process for the JOBS Act (Jumpstart Our Business Startups Act) is not having any effect at IPO Village.

A crowdfunding initial public offering in the first quarter of 2013 is still on schedule. We don’t anticipate any delays either.

JOBS and the lack of getting it fully in place, has not had any negative effect on crowdfunding. It may, in fact, be just enough to get some companies to take a second look at crowdfunding. While the JOBS Act is supposed to make investing in a small business easier, it is not absolutely necessary. Crowdfunding an IPO is in no way impacted by the JOBS act, as going public utilizing the crowd is legal under current SEC rules.

IPO Village is moving ahead with the abovementioned IPO and is in negotiations with other companies.

ALREADY BEHIND

The news that SEC chairman Mary L. Schapiro is stepping down is having a ripple effect – to use the water analogy, it’s more like excellent surfing waves than a ripple – on JOBS. JOBS was signed into law in April has yet to be fully enacted by the SEC. The JOBS Act is supposed to make it easier for small businesses to generate operating and investment capital. The Security and Exchange Commission is charged with developing the rules to implement this law.

The SEC is already running behind on getting rules in place, states a report in the Washington Post. “The agency appears to already be behind schedule, as several regulatory questions concerning investor education and fraud protection remain unanswered,” wrote J.D. Harrison.

A business waiting on the JOBS Act rules to be in place before raising capital through an equity crowdfunding offering may be waiting a while. This leadership issue absolutely will delay the already-behind rule making process. How long the delay will be remains to be seen, but with the gridlock in Congress and a likely fight over who the new permanent SEC Chairman will be, it could be well over a year before we see any rules.

DON’T WAIT ANY LONGER

There is no need to wait. The JOBS Act is not necessary for a small company to go public and generate new capital for its growth. Crowfunding an IPO can be started at any time. The coming IPO at IPO Village (info here – Sign-up with no obligation to receive the companies name and begin your due diligence) was started knowing the JOBS Act rules were still being developed and might not be ready in time for the public announcement.

Any company waiting for the JOBS Act rules to be in place might wind up behind the economic recovery curve. That’s not a place to be for a growing business. With ready investors on hand and a need to meet future demands, there’s no need to wait for JOBS. IPO Village can handle an IPO for almost any size company right now. For a free company  evaluation – click here

Crowdfunding an IPO does several things that benefit a business:

1) It puts the investment opportunity directly in the hands of the public, the people who make a small business a success. Giant Wall Street investment firms are not involved.

2) It’s cheaper for the business. The expenses of hiring high-dollar investment advisers is gone.

3) It puts more money into the business. There is no selling stock at a discount to institutional investors or an underwriter. The public buys stock directly from the company.

A CHAIRMAN NEEDED

Adding to this not-quite confusion at the nation’s top financial oversight agency is a decision by President Obama to put current SEC Commissioner Elisse Walter to pro tempore chairman. She’ll be able to hold the post through the end of December 2013, at which time a permanent chair must be appointed.

Because this is top-end rule making, the SEC must have a chairman, and a permanent chair, to oversee the deliberations and final rules creation. A pro tem chairman is not likely to want to invest significantly in the process knowing a new chairman may have different ideas.

Another monkey wrench in the plans is the nomination process. Depending on how the Republic Party feels about the president’s nomination for permanent chair, it could take a while to get someone into that seat.

Implementing JOBS fully could be well more than a year away. Businesses that need to raise investment capital now have to decide: Can you wait a year or more? If the answer is no, then consider a crowdfunding IPO.

3 thoughts on “Upcoming IPO on Track despite SEC delays on the JOBS Act

  1. Even if crowfunding IPO gets delayed people have to be patient and they have to understand that this is the path to a better future. We need small businesses to create jobs and we need the average citizen to become business owners. The way the system is structured right now we’re very limited to what we can do as businessmen, but with crowdfunding the possibilities are endless. Keep pushing and stay patient everyone.

  2. When was the last time the government did anything on time? I don’t think I was the only one who expected the SEC to delay on this and let me just put the current situation this way, I’m just glad we’re headed in the right direction and that’s all that matters for the time being. It may take a little more time, but it’ll get done and that’s the most important thing that we have to remember.

  3. It’s only a matter of time anyways. It’s going to get done and that’s no longer the question, so even though the wait is frustrating, it’s not something to be too concerned about. It’s a good time to get your company ready and prepared to go through crowdfunded IPO and when you’re done with all the preparations things will line up pretty much on time I think.

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