President Obama signed the Jumpstart Our Business Startups (“JOBS”) Act into law on April 4, 2012, calling it a “game changer.”

The legislation affects investors, entrepreneurs, and businesses across the nation. It changes how funds are raised, how businesses are grown, and how investments are made…

The JOBS Act has garnered its fair share of media attention. By now most people have at least heard of it. Most know that it has something to do with crowdfunding or increasing access to capital, but maybe not much more than that.

If you’re an investor still looking to get up speed on the details, this rundown will give you the essentials.

The JOBS Act: Title II, Title III, and SEC New Rule 506(c)

The first thing you need to know might come as a relief.

The JOBS Act contains seven titles overall, but as an investor, you only have to worry about Title II and Title III, which have become virtually synonymous with the JOBS Act itself. (Title I is also central, but concerns IPO on-ramping, and is of interest mainly to business operators.)

Title II and Title III share similarities. They both affect how funds are raised, how investors are accessed, and who qualifies to invest. But the similarities end there. Let’s sort out the differences.

Title II, Lifting the Ban on General Solicitation

Title II reverses the ban on the general solicitation of certain securities, in our case real estate investments. In other words, it allows the advertisement of those investment opportunities — publicly.

Previously, these opportunities could be made available only to limited networks of individuals that had a prior existing business relationship with the party selling the securities. Using forms of media, whether radio, television, or the internet to solicit investments was prohibited.

Under Title II, investment opportunities can now be advertised to the public. The restriction remains that only investors verified by issuers as accredited — i.e., holding a net worth greater than $1M (excluding primary residence) or whose individual income exceeded $200K ($300K for those filing taxes jointly with their spouse) for the past two years — can invest in these opportunities.

This provision did not go into effect immediately. It needed the SEC’s amendation of SEC Rule 506, which explicitly prohibited general solicitation. The rule was finally amended and came into effect on September 23, 2013. The amended rule allowing general solicitation is often referred to as SEC New Rule 506(c).

Title III, Crowdfunding

This provision concerns legalizing the raising of funds by means of crowd investing.

Unlike Title II, Title III is still pending approval by the SEC. When finalized, which may happen as early as the third quarter of this year, this title will allow non-accredited individuals to invest online into private companies. In effect, company investments will be able to be “crowdfunded” in small increments by the general public.

The amount of capital opened up by TItle III is substantial. Some estimates peg it at potential $300 billion. The size of that capital influx would have broad market implications, effecting current means of raising funds for startups and companies, such as the Venture Capital market.

The current proposed rules by the SEC aren’t without restrictions, however. Non-accredited investors won’t be able to invest any amount they wish. As it stands, investors with an income below $100K, the ceiling is $2K or 5% of income or net worth. For those with an income over $100K, the maximum is 10% of income or net worth.

Companies, too, have restrictions to follow. The most notable among them is that they are limited to raising no more than $1M per year under Title III.

A quick note on how Title III pertains to RealCrowd: In short, it doesn’t. The RealCrowd platform operates squarely within the framework of Title II as explained above.

The upshot of Title II and SEC New Rule 506(c) is that millions of accredited investors are now able to invest in many more opportunities which creates a more efficient market and can reduce typical fees associated with real estate investing.

As with Title II, the implication of Title III is increased access to capital for companies and increased access to opportunities for investors. Both Titles further “democratize” the landscape of finance, making market more open, and giving investors more freedom.

For more information about how you can use RealCrowd’s platform to fund deals, access the platform’s investor and transaction management solutions, or become a participating investor visit www.realcrowd.com.

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