Small businesses drive a significant portion of the U.S. economy by providing jobs for over half of the nation’s private workforce. According to the U.S. Small Business Administration, there were 26.8 million small businesses in 2009, which employed 49.2% of the private-sector workforce. Back when President Obama introduced the Jumpstart Our Business Startups Act (“JOBS Act”) in January 2011, the unemployment rate was on the decline at 9.0% which was still high compared to prerecession levels. The JOBS Act is intended to make it easier for startups and small businesses to raise capital. This will provide a funding source for startups that might otherwise have never made it past the business planning stage due to lack of funding. By opening up a pool of capital that was previously unavailable to the startup community, crowdfunding has the potential to invigorate local economies, thus helping our economy to continue to grow.
It is still too soon to see what impact the JOBS Act will have on the U.S. economy, but if historical data holds true, supporting entrepreneurship will help reduce unemployment and help the U.S. economy get back on its feet in this post-recession era. Here at RoC, we believe that the JOBS Act will be the main driving force behind the increase of new successful companies being founded.