Crowdfunding 101 On April 5, 2012, President Obama signed the Jumpstart Our Business Startups Act (the JOBS Act), which is intended to help smaller and emerging growth companies access the U.S. capital markets. The JOBS Act amends, and adds new sections to, the Securities Act of 1933 (the Securities Act) and the Securities Exchange Act of 1934 (the Exchange Act), as well as the Sarbanes-Oxley Act of 2002. The SEC has 270 days to enact the necessary rules to allow for crowdfunding.The JOBS Acts stated purpose is to provide small companies greater access to capital.Once the required SEC rules concerning crowdfunding are in place, both private and public companies will have the ability to raise money from a broad group of investors through the internet and social media.The JOBS Act significantly impacts the securities laws affecting private companies who go public direct and those who use traditional IPOs. The creation of the crowdfunding exemption from Securities Act registration will not only provide a way for public and private companies to raise capital, but will also ease the burden for many private companies seeking to go public direct by enabling them to more easily obtain the number of shareholders required to obtain a stock trading symbol.The Crowdfunding ExemptionCrowdfunding allows companies to sell up to $1 million worth of securities to non-accredited investors as long as no individual investor invests more than: (i) $2,000 or 5% of the investors annual income in any 12-month period (for investors with annual income or net worth less than $100,000); or (ii) 10% of the investors annual income or net worth up to $100,Nike Free Run,000 in any 12-month period (for investors with annual income or net worth in excess of $100,000).The securities issued pursuant to the crowdfunding exemption may only be offered and sold through registered broker-dealers or internet funding portals that comply with new requirements. The issuer must comply with applicable disclosure requirements during the crowdfunding offering process and after completion of the offering.Go Public Direct SolutionPrivate companies who go public direct typically file a registration statement with the SEC under the Securities Act. Upon effectiveness, the company will be subject to the SECs reporting requirements but it will not have a ticker symbol. In order to receive a trading symbol, the company must comply with the requirements of the Financial Industry Regulatory Authority (FINRA) which includes demonstrating there will be an active market for the companys securities. The only way to demonstrate an active market can be established is for the company to have a meaningful shareholder base of at least 25 shareholders. For private companies seeking to go public obtaining shareholders, like raising capital,Cheap Nike Free Run 5.0, can be a challenge.The impact of the crowdfunding exemption will be to provide private companies with the opportunity to raise seed capital and obtain the initial shareholder base required by FINRA for ticker symbol assignment. Easing the burden of obtaining shareholders will make it much easier for issuers who go public direct and reduce the number of private companies who go public in a reverse merger transaction. The bottom line is that the JOBS Act will ease the burden for companies seeking seed capital and provide a time and cost effective method for companies who public direct, making the reverse merger a less appealing option.This memorandum is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. For more information concerning the rules and regulations affecting the use of Rule 144, Form 8K, FINRA Rule 6490, Rule 506 private placement offerings, Regulation A, Rule 504 offerings, Rule 144, SEC reporting requirements, SEC registration on Form S-1 and Form 10, Pink Sheet listing, OTCBB and OTC Markets disclosure requirements, DTC Chills, Global Locks,Nike Free, reverse mergers, public shells, go public direct transactions and direct public offerings.