Frequently Used Terms

JOBS Act of 2012

The Jumpstart Our Business Startups Act or JOBS Act, is a law intended to encourage funding of United States small businesses by easing various securities regulations. It passed with bipartisan support, and was signed into law by President Barack Obama on April 5, 2012.

Accredited Investor

An individual that has either A) Net assets in excess of $1 million not including the value of his/her primary residence, B) Income over the last two years in excess of $200K per year, or C) Combined income with a spouse over the last two years in excess of $300K.

Debt vs. Equity

Many businesses may not wish to have shareholders. They would prefer to issue debt/promissory notes instead because debt appeals to a broader range of investors than stock. Additionally, the business can more readily structure exit strategies for its investors/supporters with debt than it can with shares of stock.