The JOBS Act: Random Thoughts About Investing And Egalitarianism

William Carleton, Contributing Editor, VCExperts

Some people have been working on bringing private investing to nonaccredited investors for some time - even prior to the JOBS Act - using (narrow) securities exemptions that have been in place for some time.

It's timely to look at those efforts, because there is going to be a huge letdown, once the implementing rules are written and we all see how cumbersome it's going to be to comply with the federal equity crowdfunding exemption under the JOBS Act. (I would be happy to be wrong about this.)

Trading new hope for dashed hope: to what front or fronts might efforts shift, when the bloom comes off the bits of the JOBS Act that were for "normal" people (the "99%")?

In the Rose Garden in April, before he signed the JOBS Act, the President said this:

"Because of this bill, start-ups and small businesses will now have access to a big, new pool of potential investors -- namely, the American people. For the first time, ordinary Americans will be able to go online and invest in entrepreneurs that they believe in."

I'm confident that what the President said will prove true, very quickly, for angel investing. While the Senate worked to crush the adventure and the optimism out of McHenry's crowdfunding bill, legislative language from the House concerning accredited investing - the lifing to the prohibition on general solicitation under Rule 506; a safe harbor for online angel platforms and incubators - sailed through untouched. Rules are going to be written about "verification" of accredited investor status - that's the tradeoff for lifting the ban on advertising - but private investing may be more and more about being accredited, not less.

Glum thoughts on a very sunny, glorious summer day!

William Carleton

Bill is a member of McNaul Ebel Nawrot & Helgren PLLC, a Seattle law firm. He blogs every day at