Thursday’s incredibly exciting news that the Senate approved H.R. 3606 - the Jumpstart Our Business Startups (JOBS) bill - should hearten all that grasp the negative impact of the tangling knot of regulation on the flow of capital and the success of entrepreneurship in America today.
Included in the bill is H.R. 2930 - the Entrepreneur’s Access to Capital Act - which for the first time legalizes investment-based crowdfunding.
This is game-changing as startups and small businesses and investors can now directly (and socially) connect and transact investments in amounts as little as $500.
Correspondingly, these Internet-marketed, transacted, and settled offerings will be exempt from the Byzantine state-by-state rules that effectively prevent a regulatory compliant securities offering for anyone with less than a $100,000 legal budget.
The combined effect of these law and rules changes - once they wind themselves through the economy - will be powerfully transformative.
How much so?
Well, at a crowd-funding and private capital conference I attended last week, David Weild, former Vice Chairman of NASDAQ, and one of the most informed and respected observers of the US IPO market, made the startling observation that if the regulatory environment for IPOs and for venture capital and private equity financings was as it was in the late 1990s that the nation's joblessness rate - as opposed to being its current 8+%, would be less than 3%, or above the level of full employment.
As exciting, the amazing, networked power of crowdfunding will usher in a true golden age for U.S. startups.
What would this look like?
Well, try on for size quick and efficient financing for any project, any product, any company that a thoughtful and passionate entrepreneur, artist and/or cause-oriented activist can dream up.
And correspondingly, how about freedom for all those with the gumption to go for it to not to have to stay in a job they don't like just to pay the bills?
How about everyone - for the first time in the history of any society – living and working at the top of the hierarchy of needs and be about - and only about - self-actualization and causes larger than themselves?
In the words of the famed social scientist, Daniel Pink, how about all of us leading professional lives of full autonomy, mastery, and purpose?
Am I overstating the impact of one bill?
Am I not speaking to and about its drawbacks, especially to the dangers of fraud and to investor protection of the regulatory loosening?
No, I don't think so.
Smart people like David Weild, Vince Molinari, Michael Moe, Phil Reicherz, Dara Albright, and many, many others agree that fixing and updating for the Internet age the broken regulatory framework for our private and public equity markets is in the top 3 to 4 of all government levers to transform our economy for the better.
It is not as much a question of whether or not these law and rules changes will have this kind of impact, only of how long it will take.
So for those of you that despair for the fate of our world and of the inefficacy of our government and political systems, hold on just a little longer.
The arc of human progress is about to take a major upswing.
I can't wait.
Next week: Winners and losers in this new and coming frictionless financing and crowdfunding world.