The US Senate has passed an amended version of the Jumpstart Our Business Startups Act (JOBS Act), which legalizes crowdfunding for start-ups and also loosens regulations for initial public offerings of smaller "emerging growth companies." The House previously passed a similar bill, and the two versions will now have to be reconciled and then signed by the President.
The crowdfunding provisions of the Senate bill will enable companies to raise up to $1 million per year from "small-dollar investors" through SEC-approved crowdfunding portals. "Small-dollar investors" are able to invest a small portion of their annual income in these companies.
The IPO portion of the bill creates a new group of "emerging growth companies," which are companies that have less than $1 billion in annual revenue, and for up to five years exempts these companies from some of the provisions of the Sarbanes-Oxley act. In addition, the bill relaxes the 500 shareholder rule, which requires companies with over 500 shareholders to make public disclosures, by increasing the number from 500 to 2,000. The bill also loosens restrictions on equity research reports, and relaxes other requirements for the IPO process.
Here are links to a couple of stories on the bill:
WSJ - All Things D: http://allthingsd.com/20120322/senate-passes-crowdfunding-bill-with-added-protections-for-non-accredited-investors/?mod=tech
NY Times: http://www.nytimes.com/2012/03/23/business/senate-passes-start-ups-bill-with-amendments.html?_r=1&ref=business