Online social sites will likely be the new place to issue stock for small companies. There is amazing support behind the idea and we are now at a point of just ironing out the details. The Entrepeneur Access to Capital Act removes many of the federal regulatory hurdles put in place in the 1930’s when issuing stock. It appears that raising $1m per year will be the cap and there will certainly be some cap per person investing as well. Crowdfunding sites like Kickstarter, IndieGogo, RocketHub and Peerbackers will likely benefit from this legislation. There is some talk of adjusting the rules so other social sites like Facebook, Twitter and LinkedIn can participate as well.
On the one hand, it’s interesting to see the partial unwinding of this Great Depression era legislation happening with such expediency. So many blame the unwinding of the 1930’s Glass Steagall Act for todays problems with the financial system in the United States and ultimately the economic malaise throughout the world. Yet, on the other hand, the US states with the lowest unemployment rates today have the strongest presence of small businesses.
Time will tell us how this works out, but making it easier for small businesses to be built and thrive is a good thing.