At the Digital Hollywood conference in Los Angeles last week, L.A. Tech & Media Law Firm founder David Sharifi predicted how the Jumpstart Our Business Startups (JOBS) Act will change fundraising for movies and tech startups.
You can read the complete JOBS Act at this PDF link. Sharifi outlined what still needs to be implemented with the bill and how the SEC could make it much easier for larger projects to raise funds. Sharifi explained:
[Hypothetically] I can’t offer you guys a thousand dollars per share and raise a million dollars right now. Unless you’re an accredited investor and I’ve registered with the SEC and I’ve done basically the amount of legal legwork needed to do an initial public offering. So it’s tremendous hurdle for today’s entrepreneurs or any startup. And that barrier is being relaxed a little bit through the JOBS Act.
It’s been signed into law and became effective in January of this year. But the SEC has specifically said that they will not allow solicitation of equity-based fundraising until they write out the rules. And I think a lot of experts have an opinion on this.
It’s probably going to come into effect about a year from now. I know that our firm is starting to gear up to offer legal products for companies that are seeking that type of equity-based financing. That’s the forecast in terms of when it’s going to be legalized. Obviously, there’s going to be a lot of trial and error in terms of getting it right, but it’s really exciting.
If you want to explore this topic more, Entrepreneur has a longer article getting opinions from a variety of experts about the future of crowdfunding and the JOBS Act.