JOBS Act Impact on Private Placement Transactions

Summary

This practice note discusses the impact of the Jumpstart Our Business Startups Act (112 P.L. 106) (JOBS Act) on capital formation and private placements. In some circumstances, the JOBS Act eliminates a key concept for private offerings — that the offering be private (meaning no advertising or general solicitation) for sales (offers don't count) made solely to accredited investors. The JOBS Act also provides for crowdfunding offerings of up to $1 million but limits the amount any investor may invest in the offering. Unless otherwise indicated, this practice note does not discuss developments after the passage of the JOBS Act and its related rules and regulations.