The Jumpstart Our Business Startups (JOBS) Act turned five years old today.
The legislation paved the way for companies to leverage the equity markets in new and useful ways. It’s been quite durable during five years of increasingly hostile partisanship and gridlock. While nowadays it’s probably easier to name the Obama-era regulations the White House does not want to touch rather than the ones it has promised to repeal or tear apart, there is no real chatter about rolling back the JOBS Act’s provisions.
Former Rep. Jim Greenwood (R-Pa.) put it well in an op-ed published today in The Hill:
Reaction to President Trump’s decision to cut two regulations for every new one added is a great political Rorschach Test. If you free-associate words like job-killing, compliance burdens, legal bills and “sea of paperwork,” you’re probably a Republican. If you worry about corruption, pollution, safety or “too big to fail,” you’re most likely a Democrat. …
Exactly five years ago, the JOBS Act became law after an overwhelming bipartisan vote in Congress. It was a rare triumph of compromise and regulatory sanity in the nation’s capital — a law that recognized regulations are both necessary and frequently overbroad.
To be clear: The JOBS Act is exactly the sort of regulatory framework that has enabled the startup sector to grow, in terms of number of companies as well as their cumulative impact on the economy, during the past five years. In 2014, companies in their first five years of life — how one might define a startup — created 2.2 million new jobs on a net basis. Companies older than five years created just 450,000.
Startups are responsible for much of the innovation that makes its way into corporate America as well as into consumers’ hands and homes, and they are where jobs tend to come from in today’s economy as well. True, not every startup has an appetite for capital, but many will look to scale, and that more often than not requires tapping the capital markets for funds.
We created Vested Ventures, our division that takes direct equity positions in startups, to fully commit to working with startup companies, and we hope that, five years from now, we can look back and see similar progress.