Key takeaways:

Calls for reform of the capital formation process were answered today when the President signed the Jumpstart Our Business Startups Act (the “JOBS” Act) into law. As we have previously reported to you, the Act will:

• Ease access to the public capital markets for a newly created category of “emerging growth companies.”
• Eliminate the prohibition against “general solicitation or general advertising” in certain unregistered offerings of securities.
• Relax the trigger for public company reporting requirements and regulation by increasing the shareholder of record threshold from 500 to 2,000 (or 500 non-accredited shareholders).
• Facilitate capital formation by start-up companies through “crowdfunding.”
• Create a new class of exempt securities for small issuances up to $50 million.