A change is coming to private investing markets, and it could revolutionize how small businesses are financed: unaccredited investors can start buying stock in start-ups.
The JOBS Act took effect in 2012, helping pry open the initial public offering pipeline that was effectively welded shut in the wake of the global financial crisis, fostering millions of dollars of investments in burgeoning start-ups. The only ones left out of the equation were ordinary Americans. But based on President Barack Obama's speech, they probably didn't expect it.
"Because of this bill, start-ups and small business will now have access to a big, new pool of potential investors — namely, the American people," Obama said at the signing ceremony for the act. "For the first time, ordinary Americans will be able to go online and invest in entrepreneurs that they believe in."
For years, this portion of Obama's JOBS Act pledge went unfulfilled, as the Securities and Exchange Commission dragged its feet in the final stages of the regulatory process that would allow unaccredited investors to begin backing growing companies. As of Monday, it all changed.