Obama Quietly Passed This 2012 Law That Has Helped Create Over 100,000 US Jobs And Over $1 Billion In Funding For US Small Businesses

The overwhelming majority of Americans haven't heard of the Jumpstart Our Business Startups (JOBS) Act. 

The act passed with largely bipartisan support, then didn't go into effect for nearly four years after passing. This means the bill passed through the congressional process quietly and garnered little media attention. But since going into effect in 2016, the equity crowdfunding industry has become a billion-dollar powerhouse, creating over 100,000 jobs for U.S. startups and small businesses. 

The JOBS Act effectively created a regulatory framework allowing startups to raise investment dollars from their communities and stakeholders. This gives anyone the ability to invest in startups, not just the wealthy. This is facilitated through companies like StartEngine and Wefunder, equity crowdfunding portals that act as facilitators in the space.

Over $1 billion has been invested in U.S. small businesses under this regulatory framework. It hasn't cost taxpayers anything, but it has helped create roughly 100,000 jobs in the U.S. StartEngine's ongoing equity crowdfunding campaign has seen retail investors invest over $18 million.

Wefunder, another leading equity crowdfunding portal, publishes a yearly impact report. Between 2012 and 2021, the company has helped companies create 41,187 jobs, raise $657 million and fund 3,068 small businesses. 

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Crowdfunding opens a new wealth-creation device for retail investors. Many of the world's billionaires made their fortunes building and investing in startups at their earliest stages. Venture capitalists have raked in billion-dollar paydays and outsized returns along the way, but retail investors were traditionally excluded. 

Wefunder thinks the crowd, over the long term, will better predict winners than traditional venture capital in what it calls the "wisdom of the crowd." The logic is that when consumers are also the investors, they take stakes in products they use and enjoy. After all, who better to predict what's going to perform well than those who buy the product?

On average, it takes at least five years for a startup to scale to an exit. The relative infancy of the equity crowdfunding industry, coupled with it only gaining some mainstream popularity in 2020 means many of the success stories are still brewing. But StartEngine recently published a list of 40 startups on their site that crossed the finish line. 

While it's unclear what the future of the industry holds, the equity crowdfunding industry so far is having a profound impact on several aspects of U.S. small businesses and retail investors.

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