The US JOBS Act, short for "Jumpstart Our Business Startups", is one of those nice broad conceptions that falter in the details.  There seems to be fairly universal agreement that small business is the bedrock of North American economic growth, and that the last few years have been tougher than usual on these companies.  And as a small business person working with small businesses, I can pretty much vouch for that.  So the idea of supporting small businesses and helping them grow without entangling them in too much bureaucracy is appealing.  Hence the JOBS Act -- a small sampling of the massive associated media response is headlined at the end of this entry.


The catch is that at least some of those bureaucratic entanglements have to do with governance and investor protection, things that Wall Street has demonstrated -- at the very least -- a reluctance to deal with seriously, permanently, and comprehensively. Wall Street seems to be thrilled with the bill, which is enough to make many small investors worry.  The big investment banks see profit potential in combination with reduced regulation:  the same combination that triggered the freefall in 2008.

It is important to invest in our start-ups, and it would be very positive if more people considered them as part of a diversified portfolio.  However, as consultants we try to encourage ambitious start-ups to treat themselves as public companies from the outset, especially in terms of governance and disclosure.  Here we have a bill that seems to be encouraging companies to do the exact opposite.  Hmmm.  Wonder how attractive that will seem to private equity investors.

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DealB%k
Wall St. Examines Fine Print in a Bill for Start-Ups By SUSANNE CRAIG and BEN PROTESS (April 4, 2012)

 http://dealbook.nytimes.com/2012/04/04/wall-st-examines-fine-print-in-a-new-jobs-bill/?nl=todaysheadlines&emc=edit_th_20120405

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Slate
Now Everyone Can Lose Big Investing in Startups
Obama’s new crowdfunding bill democratizes venture capital, for good and for ill. By Will Oremus|Posted Friday, April 6, 2012, at 12:59 PM ET

http://www.slate.com/articles/technology/technology/2012/04/jobs_act_now_ordinary_people_can_lose_big_investing_in_startups_too_.html?wpisrc=newsletter_slatest

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The Globe and Mail

U.S. Jobs Act doesn’t mean Wild West for companies
By Olivia Oran
Reuters
Posted on Monday, April 9, 2012 7:38AM EDT
http://www.theglobeandmail.com/report-on-business/international-news/global-exchange/international-roundup/us-jobs-act-doesnt-mean-wild-west-for-companies/article2395732/ ___________

Oh frabjous day!

Lewis Carroll had it right. With the market's vorpal blades going snicker-snack, it's way too easy to see tragedy coming even on the brightest day. I envision my portfolio evaporating and my client base dwindling, and I can get quite deep into the drama of it all. Intransigent Greeks (no gifts forthcoming, apparently), idiot politicians (into which category nearly all US incumbents and wannabes now seem to fall), the falling dollar, increasing protectionism, European devolution -- we're not getting a lot of good economic news.

So, cock-eyed and contrary optimist that I am, I start to tally blessings. Resource companies continue to get funding, and the commodity markets are still holding. Gold stocks, especially for smaller entities, are undervalued and represent a real buying opportunity -- particularly with the Chinese starting to make gold property acquisitions offshore.

Technology innovation is strong in Canada, and start-ups are getting an unprecedented amount of government help to commercialize their products (just ask me!).

Even biotech is showing some signs of hope. The US seems to be working on developing a better relationship with China, one of the outcomes being Chinese agreement to help protect IP.

Never mind the market volatility -- pundits wiser than I suggest much of this is mechanical, or at least mathematical, and there is money to be made in the swings as well as in steady growth.

And Angela Merkel has made stocky women hotter than they've been since Peter Paul Rubens was mixing egg tempura.

So for now, we seem to be holding our own against the forces of chaos.