Just Why Can’t Your Business Advertise it is Seeking Funds (Yet?)
In April 2012, the JOBS Act was passed – which was seen as a huge victory to help businesses raising capital for growth and expansion.
To say I’m a huge fan of the changes in the JOBS Act may be an understatement – I’ve testified on Capitol Hill about how these rules help entrepreneurs (you can read my written testimony here and here). There were lots of pieces of the JOBS Act that helped larger businesses on the public markets, that supported investors and that will pave the way for crowdfunding.
I was most excited about a relatively small provision – the removal of the ban on general solicitation. In short, it lifts the ban preventing companies and individuals from advertising that they are raising funds for their business. It has the potential to be incredibly powerful.
Here’s the bad news: SEC has not yet changed the rules, which means small businesses still cannot advertise that they are raising funds.
Ask many small businesses (home builders, retail owners, transportation companies, etc.) what it is like to try and get a bank loan today. You’ll hear what I’ve been hearing: Banks are lending less than ever to small business owners (partially because of some of the unintended consequences of the Dodd-Frank Act). The parents of a close friend who have a 35 year track record as home builders were denied for a loan – the same loans they’ve used over the past 30 years to build a successful, job-creating business. Someone (maybe an angel investor, another company or even another bank) should be willing to make this loan – IF they knew about the company.
Let’s do something about this… let’s tell the stories of the companies that removing the ban will impact to urge the SEC to move ahead on this. Congress already approved removing the ban, but now the SEC is holding this up – which makes no sense. Maybe they don’t realize the impact sitting on this since April is having – so I want to show them.
I want to learn how removing this ban would help businesses like my friend’s parents. I’m trying to survey at least 100 small businesses who would like to raise funds and would even advertise (if they could). If you are a business owner or know of any business owners like this, please take 5 minutes to fill out this survey. I’ll aggregate these results and publish them here on my blog.
Want to share this survey with other business owners? Email it, post on Twitter or share it on Facebook.
Thanks in advance for your help. Please spread the word and help me find at least 100 small business owners willing to share their story on how lifting this ban would let them advertise and find funding to grow their business. Feel free to shoot me any questions you might have.