What Is the JOBS Act?

The JOBS Act (the Jumpstart Our Business Startups Act) is a 2012 U.S. federal law that reshaped how startups can raise capital by expanding and modernizing certain exemptions from securities registration. If you’ve seen startups raise online from the public, or advertise a private round on the internet, you’re seeing the JOBS Act’s fingerprints.

The core idea

In the U.S., selling equity is usually required to be registered with the SEC unless an exemption applies. The JOBS Act didn’t “legalize fundraising” so much as it created and expanded specific exemptions that make it easier for companies to raise money without doing a full IPO.

The parts founders and investors talk about most are:

• Title II: lets some private offerings use public advertising (Rule 506(c))
• Title III: created Regulation Crowdfunding (Reg CF), allowing “equity crowdfunding” from the public through regulated intermediaries
• Title IV: expanded Regulation A (often called Reg A+), sometimes described as a “mini-public offering”

What the JOBS Act changed (in plain English)

Before the JOBS Act, the practical path for most startups was: raise privately, don’t advertise, and mostly stick to accredited investors (with narrow exceptions). After the JOBS Act, there were new and improved options:

• Startups could publicly market certain private offerings if they only accept verified accredited investors (506(c)).
• Startups could raise smaller amounts from everyday investors online under a dedicated exemption (Reg CF), using an SEC-registered intermediary.
• Startups could raise larger amounts from the general public via Regulation A, with SEC qualification.

Title II: Rule 506(c) and general solicitation

Title II led to Rule 506(c) under Regulation D, which became effective in 2013. The big change: a company can generally solicit (advertise) a private offering, as long as it sells only to accredited investors and takes reasonable steps to verify that accredited status.

Key practical takeaways

• Rule 506(c) is still a private offering under Reg D. It’s not “crowdfunding.”
• You can market publicly, but you can’t take non-accredited checks.
• Verification is not optional; “check-the-box” is generally not enough for 506(c). What counts as “reasonable steps” depends on the facts and circumstances.

Title III: Regulation Crowdfunding (Reg CF)

Title III created Regulation Crowdfunding (Reg CF), which became effective in 2016. Reg CF is the exemption that most people mean when they say “equity crowdfunding”: it allows companies to raise capital from both accredited and non-accredited investors online, but only through an SEC-registered intermediary (a registered funding portal or a broker-dealer) and subject to specific disclosure and process requirements.

What founders should know

• Reg CF has a maximum amount you can raise over a 12-month period. That cap has changed over time; you should confirm the current limit before launching.
• Reg CF comes with required disclosures (including a Form C filing) and ongoing reporting obligations after the raise, in most cases.
• Unlike 506(c), Reg CF is designed to include non-accredited investors, with investor-level limits that depend on the investor’s circumstances.

Title IV: Regulation A (Reg A+)

Title IV expanded Regulation A, with the updated rules becoming effective in 2015. Regulation A is often described as a “mini-public offering” because it allows sales to the general public, but it requires SEC qualification of an offering statement and comes with more upfront legal/accounting work than Reg D.

Two tiers, different requirements

Regulation A is divided into Tier 1 and Tier 2. The details matter (including limits, review, and ongoing reporting), and they’re not the same across tiers. Most companies considering Reg A should work closely with experienced securities counsel.

Key distinctions founders and investors should not mix up

• Reg D (506(b) or 506(c)) is a private offering exemption; Reg CF and Reg A are routes to include the general public (with specific rules).
• Public advertising is allowed in 506(c), but only accredited investors can invest and they must be verified.
• Reg CF and Reg A have structured disclosure regimes; you don’t get to “just post a pitch deck and take checks.”
• What a platform supports operationally is not the same thing as what securities law allows; the exemption and your facts drive the legal requirements.

JOBS Act key titles (summary table)

Title	What it did (high level)	When rules took effect
Title II	Enabled general solicitation for certain Reg D offerings (Rule 506(c)), with accredited-only sales and verification	2013
Title III	Created Regulation Crowdfunding (Reg CF), allowing online investment by the general public through registered intermediaries	2016
Title IV	Expanded Regulation A (often called Reg A+), enabling broader public offerings with SEC qualification	2015

Examples: which part of the JOBS Act are you actually using?

Scenario 1: “I want to tweet my round and take checks from angels I’ve never met.”

If you want to advertise broadly and still stay in Reg D territory, you’re usually talking about Rule 506(c): you can market publicly, but you must limit investors to accredited investors and verify them.

Scenario 2: “I want customers and the community to invest $100–$1,000.”

You’re usually talking about Reg CF: non-accredited investors can participate, but you have to do the raise through an SEC-registered intermediary and follow the Reg CF disclosure and process rules.

Scenario 3: “I want a larger public raise and I’m willing to do something closer to a public offering.”

You’re usually in Regulation A territory. It can reach the general public at larger scale than Reg CF, but it’s typically more expensive and time-consuming than Reg D or Reg CF.

Frequently asked questions

Who supported the JOBS Act?

It had bipartisan support and was signed into law by President Barack Obama in 2012. It was widely supported by entrepreneurs, startups, and investor advocates who wanted more workable paths to raise capital.

Has the JOBS Act been updated since 2012?

Yes. The SEC has revised the rules over time, including amendments that changed offering limits and other requirements across exemptions. If you’re planning a raise, confirm the current rules and caps, because numbers you see in older articles may be outdated.

Did the JOBS Act mean “only accredited investors” was no longer the rule?

Not across the board. Reg D offerings still generally revolve around accredited investors (and 506(c) is accredited-only). The JOBS Act expanded access to non-accredited investors mainly through exemptions like Reg CF and Regulation A, each with its own limits and compliance requirements.

Bottom line

The JOBS Act didn’t create one new fundraising method; it created and expanded a set of legal paths. If you’re fundraising, the most important thing is to identify which exemption you’re actually using (Reg D vs Reg CF vs Reg A), because the marketing rules, who can invest, and what you must file all change from there.