Financial Regulations Gutted in New Bill

Under the JOBS Act, the column noted that some companies would be able to raise up to $1 million in funding on the Internet through what is known as crowd-funding. Yet, Justin Hovey, a Pillsbury partner who helps startups, only recommends crowd-funding as a last resort. "Administratively, it is no small task to take small amounts of money from a large number of investors,” he said. "Dealing with a large shareholder base is a big distraction "from operating your business."

The Act would also create a new category of "emerging growth companies" that could go public and be exempt from some SEC rules for five years or until they exceed the size limits, whichever comes first. Hovey said most companies going public would qualify. As a result the JOBS Act is a "significant relaxation of regulatory rules ... that a lot of companies will appreciate."