President Obama Signs JOBS Act, Allowing Crowdfunding

Kira M. Newman Apr 5, 2012 Tweet

Today, President Obama signed the JOBS Act and opened up a new avenue of funding for entrepreneurs: crowdfunding.

At a ceremony in the White House Rose Garden, he reiterated his faith in American entrepreneurs to help our economy recover:

“I’ve never been more confident about our future. And the reason is because of the American people.  Some of the folks beside me here today are a testimony to that. Day after day, they’re out there pitching investors. Some meetings go well; some meetings don’t go so well.  That’s true for me, too,” he joked.

Congress must have felt the same; in an out-of-character move, it passed the JOBS Act with bipartisan support. Critics worry the act will create a bubble by pumping money into poor investments – or, worse, outright scams – so Congress included safeguards for investors that crowdfunding sites must comply with.

Another supporter, Startup America chairman Steve Case, believes the JOBS Act will give a chance to startups outside Silicon Valley:

“I expect crowdfunding to be particularly helpful to the entrepreneurs who often get overlooked because they are not located in the cities where venture capitalists tend to cluster ­ or to the entrepreneurs who live in those cities, but aren’t able to break through and get noticed in what is all too often a somewhat clubby ‘who you know’ type business,” he wrote in a blog post.

A host of platforms are already planning to offer equity-based crowdfunding, including EquityNet, IndieGoGo, GrowVC and TechMoola and many others.

Here is Obama signing the act: