2016: Small Business Is Changed Forever

By mid-2016 for the first time, businesses will have the ability to raise capital from “the crowd” using all of the tools of the 2012 JOBS Act. The legalization of “equity crowdfunding” opens the door for start-ups and young businesses to grow without having to rely on fat cat rich investors, vulture capitalists and banks who would not lend money to anyone without getting title to their house, car and Chihuahua in return. In 2016, you will be able to go online, watch a video, then read and learn about a private company looking for investors, and actually buy stock in that business online, through funding platforms like BankRoll and others that allow these transactions to take place without hassle, in the comfort of your home, from your computer, tablet or smart phone.

Let’s remember: small businesses need money to grow and prosper, and these companies are what this country’s economy was built upon. More small businesses = more jobs. More jobs = more money spent throughout the economy and less government reliance for everyone. Less government handouts means (in theory) less taxes to pay. All of this is good, unless you happen to be in love with high unemployment rates and really want to see the USA lose its status as the greatest economic power in the world.

Equity crowdfunding is not just great for business. It is also an opportunity for the average Joe who has been forbidden by archaic securities laws from investing in startups and small private companies for 80 years. Why were these laws in place preventing the masses from investing in new companies until equity crowdfunding became a reality in the last year? Frankly, the government thought if you were not rich, you were not smart enough to invest in something they think might be risky. For eight decades, the government has tried to protect you from your own “stupidity” when it comes to your money. This is the same government that does not care if you “invest” every dime you have at your local casino or how much of your paycheck you spend on the government-run lottery in your state. “Invest” $50 in a 14,000,000 to 1 chance at a lottery jackpot? No problem! Take your paycheck and pour it into the slot machines at the state-tax cash cow local casino? Go for it! Put $50 into the next Apple, Facebook or Google when they are still small private companies? No way Jose, you were not smart or rich enough to risk that money on such a frivolous investment!

With the new equity crowdfunding laws, everyone can invest in what could become “the next big thing” and do so with a small amount of money that will not keep you from your $6 coffee at Starbucks or from putting delicious Chipotle take-out on the table for your family. Thousands of small investors banding together to create a pool of millions of dollars of new capital is a great thing for both businesses and everyday investors. That’s what the crowd is all about.

There are two new equity crowdfunding laws — one in effect already (Regulation A+ or the “Mini-IPO”), and one that will go into effect in 2016 (Title III Equity Crowdfunding). Both will allow anyone to invest in these new, online opportunities. Both will have limits on how much you can invest based on your income and net worth. And both will, for the first time, give small companies a chance at a very early stage, to get the general public excited not just about their products or services, but also about the chance to invest and own a piece of the company and its profits.

I write about equity crowdfunding for Entrepreneur.com and you can read my articles by clicking here. These articles are geared towards the entrepreneurs out there who want more of the nuts and bolts of how these laws will work. They are great for educating yourself on the process, the inner workings, and how the laws work. Read them. Please. I like when people read my stuff. So do my editors.

But I decided to write for Medium for a different reason.

Here, I can give you my unfiltered thoughts. Here, you can see inside the brain of the guy Forbes called “one of the top JOBS Act and Regulation A+ attorneys in the country.” When you see inside my brain, don’t expect to see a lot of Latin phrases and fancy lawyer-speak. You are going to see (and read) the real scoop on all of this. You will see, for example, my frank thoughts on why Wall Street (don’t get me started), the banking industry (who single-handedly almost destroyed our economy in 2007 and somehow got away with it) and the old money rich folks despise (hate is not a strong enough word) equity crowdfunding. You will see stories of the good in crowdfunding, and the bad. Maybe even the ugly.

And, hopefully along the way, you will see that not all attorneys are created equally. Some of us actually care about things other than charging $650 an hour for you to call us on the phone. Some of us really want to see you succeed. Some of us actually have a sense of humor. Not many, but some.

If you want to peek inside my brain (no neurosurgery required) follow me on Medium. I’ll try to keep you informed, entertained, and not covered in disgusting grey matter.