The Jumpstart Our Business Startups Act (JOBS Act) that President Obama signed last Thursday is to quote the president, “a game changer.” Thank you, Mr. President. It has a number of provisions that will not only allow small businesses to raise much-needed equity for the first time by going public but also will go a long way to finally leveling the playing field for non-accredited investors. In a nutshell, a non-accredited investor is a person or organization that does not have a million dollar net-worth or make hundreds of thousands of dollars. The 99% in other words.
Finally allowing non-accredited investors the opportunity to do what the rich have always been able to do—directly fund the next best thing since sliced bread–can be a game changer. Although the JOBS Act is not perfect, I would like to take credit for, if nothing else, planting or watering the seed in the president’s head.
It occurred after he had secured the Democratic nomination for the presidency in 2008. He was getting his hair cut at the same barber shop in Hyde Park that I also patronized. I happened to have my office in the same building as well. When I came outside to meet a small business client, I noticed black, Secret Service SUV’s around the building and thought, “Obama must be getting his hair cut.” I peeked in the shop, and sure enough, he was.
Since I wanted to promote my books, you know what I did. I ran and got the copies of the books that I had written, burst in the barber shop, smiling and with a loud voice exclaimed, “Barack Obama!”
He looked up, so did the barber and a few others in the shop, as I proceeded to give the Democratic nominee for the office of the president my books and tell him, “You’re going to need to implement what is in these books to get the economy moving in the right direction.” A couple of days later, his barber emphatically let me know that wasn’t protocol, “Don’t you know this man is liable to be the next president of the United States?” I did. And that’s exactly why I did what I had to do as an entrepreneur. I seized the moment.
Honestly, I don’t know if the president read the books. What I do know for certain is that when he left the barber shop, he had more than a fresh haircut. In my three or so minute briefing/infomercial, he got my fresh economic ideas and two books. Although the books talk about the unequal and thus unjust distinction securities laws create between accredited and non-accredited investors and also the unjust regulatory burden placed on entrepreneurs to register investments with the SEC, the primary subjects of the series are how to value investments, manage risk and play a role with money. It also mentions how regulatory discrimination contributes to the ever-increasing wealth divide and hampers economic development and how financial crises will reoccur without systemic change.
He only had to read the first two pages of chapter one in Book II (No license needed, just drive) and a few pages in chapter three of Book I (The masses have been illegally classed) to learn or be reminded of how detrimental and unjust the legislation was. Maybe when the crowd funders promoted what could have been titled the Conduit Funding Jobs Act mentioned allowing unlimited participation of non-accredited investors, it resonated with the president. “I’ve read this before,” he may have thought. “That’s what January suggested in his Mo’Sense books.”
Eliminating the regulatory discrimination is just one thing that I identify as being needed. We don’t need to regulate more and continue to unjustly lock out the public from potentially lucrative investments to prevent defrauding as many opponents of the JOBS Act argue. The most important thing that the public need is a new way of thinking about what role they play with their money, how to value investments and how to manage risk properly as my books teach.