NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Friday, January 17, 2014

The JOBS Act, or Jumpstart Our Business Startups Act, became law in 2012 and paved the way for companies to use crowdfunding to access capital. In September, 2013, Title II of the JOBS Act — which allows for general solicitation of accredited investors — was implemented. As of October, however, the Securities and Exchange Commission had merely proposed rules for Title III, which allows unaccredited investors to enter the market.

How disruptive is crowdfunding, and how will this disruption unfold? Here are four ways the industry could gain momentum in 2014:

1. Title II will grow, but Title III will not. General solicitation will change both private equity and venture capitalism. And deals that take advantage of general solicitation under Title II of JOBS Act will gain popularity.