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/ ___________

The federal election in the US is provoking strong thoughts about truth (rather than 'truthiness' as described by Stephen Colbert so usefully) and ethical behaviour.  The leading Republican candidates seem quite willing to dispense with truth in the fight to win power, but few commentators are calling them on it.  It makes me wonder if we have become so sensitized to the need to call a spade an earth-moving implement that we are hesitant to identify and name lying as such -- that we have become inured to bushwah.

So does this extend to the business as well as politics?  As an investor-relations consultant, I have a responsibility to ensure that my clients' stories are told clearly and honestly.  Otherwise it is impossible to manage investors' perceptions and expectations (it's hard enough when you're dealing with fact let alone adding fiction).  If you are in investor, is it your sense that more businesses are falling prey to a tendency to stretch, paint, mould, embroider, or alter fact to entice you to buy stock?