On April 5th, President Barack Obama signed the Jumpstart Our Business Startups Bill. The crowdfunding provision of the bill could mark a new era for startups and make it easier to procure funding from new investors to early and later-stage health care companies.
According to an article in MedCity News, not everyone shares this view. Some investors believe that with less rigorous regulatory check and balances on company finances, the risk of investors getting burned increases.
The article has three individuals from the investment community share their thoughts. Here is a brief recap:
• Be careful for what you wish for: The risk of novice investors getting burned by bad investment choices could have a negative impact on all the crowdfunding money the act is designed to generate.
• There will be winners and losers: Some firms will benefit, while some will fail. Despite the new legislation, launching startup will remain a “crapshoot.”
• It will remove barriers that stymie growth for small businesses: The new legislation will help remove barriers that made it hard for startups to go public.
The well-intended legislation continues to generate both positive and negative comments. What is your opinion of the The Jobs Act? Please share your thoughts.
Photo Credit: Kheel Center