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Will the Jobs Bill Help Small Businesses in Martinez?

President Obama signed the JOBS act Thursday with the aim of making it easier for entrepreneurs to solicit money and investors to answer the call. Will local businesses benefit?

Martinez is proud of its many small businesses and the weather they've toughed in the last few years. But in a tumultuous economy, when staying afloat is hard enough — how could local entrepreneurs possibly thrive?

President Obama sees an answer in his freshly signed bill, the Jump-Start Our Business Start-Ups (JOBS) act. The bill aims to create jobs and encourage entrepreneurs by making it easier for small businesses to publicly fundraise and investors to do what they do best.

The JOBS act will kick into gear in 90 days, when private businesses will be able to publicly solicit funding thanks to the lifting of the "general solicitation" ban for start-ups. Currently, private businesses have to be willing to make an initial public offering (IPO) of company stock before they can start asking the public for money. Most companies need to be pretty stable and financially sound before they do this, since it includes making all financial records public and also gaining another set of stakeholders to answer to. Facebook, for example, just filed its IPO paperwork — eight years after the company's founding, and with a rumored $100 billion of stock on offer.

Obama and the JOB act supporters say the new bill is a boon for Main Street, America. But what will it mean for Main Street, Martinez?

Well, it could mean more entrepreneurs taking a chance on opening a small business here, and more chance that they'll have the financial backing to get a good, strong foot in the door. But an open door for opportunity is also an open door for problems, according to CNET's Rafe Needleman. The act could encourage scammers and fraudsters, and could also mean that a lot of unprepared, "ordinary Joe" investors lose their money when companies fail.

What do you think the JOBS act means for entrepreneurs and small businsses in Martinez? Would you help fund a start up here?

Bill Schilz April 06, 2012 at 12:11 AM
While I love the idea, it truly scares me at the same time. In times of disasters and lots of construction needs to be done, don't we see a lot of scam artists showing up at unsuspecting people's doors promising solutions to their problems, only to be fleeced? This act has the same potential for bringing out the scam artists too! Legitimate small businesses, especially startups, will find much of the funds they desperately need to bring their products/services to market and for so long, they have been hampered by the laws prohibiting public solicitation of funds. This has the potential of bringing in a lot of capital to jumpstart the businesses and create jobs. Caveat emptor... if the deal seems too good to be true, it probably is! If you don't have the skills and abilities to do due diligence on an investment of this type, bring in a professional who does and have them look through it thoroughly! The one thing about this which is a shining star is that legitimate investments may arise which will give significantly better returns than any other vehicle out there now. CDs and Treasury bills are paying nothing and people's money isn't growing. There may be some opportunities to see growth in your assets finally!
Anne Mobley April 06, 2012 at 06:26 AM
Totally agree with you, Bill. This bill does nothing for most small businesses in Martinez. If Obama wanted to help, he would give us tax breaks. Stock options? Pleeaasse...I can barely pay for my employee's salaries!!! I get no paycheck.
Emily Henry (Editor) April 06, 2012 at 03:28 PM
Anne, thank you for weighing in on this. Apparently this is the first phase of a larger plan, which will include tax cuts for small businesses of 20%. Obama said yesterday that the house will vote on the tax cuts this month. According to the American JOBS Act website (http://www.americanjobsact.com/helping-small-businesses.html), Obama is proposing three tax cuts for small businesses: a 50% reduction in the payroll tax, a tax holiday on payroll growth, and an extension of 100% expensing into 2012. But these cuts still seem aimed at new and growing businesses, rather than struggling small businesses that have been around for a while. What do you think?
Chris Kapsalis April 06, 2012 at 06:13 PM
Unfortunately, with Partisanship and an election coming up, one side will not work with another that might make them look good , stalling progress and hurting the economy. Until we drop this party line stuff and partisanship and work together somehow, things will only get worse. Also politics are nothing but people tooting their own horn, trashing the other side or even an opponent from the same side during elections. People blame the other side when things go wrong, and take credit when it goes good, worrying more about saving their own hide then making positive change, being honest and maybe telling people the truth? The democratic experiment needs more experimenting, much more.
Anne Mobley April 06, 2012 at 07:28 PM
No Emily, this will not help me and others already struggling with small businesses. A 50% reduction in payroll tax would be good if it applied to small businesses already established. How about a reduction in self-employment taxes?
Chris Kapsalis April 06, 2012 at 09:02 PM
What gets me is why someone who makes more, for what ever reason, has to pay a higher percent of taxes? If someone makes $100,000, and they pay 20%, that's $20,000. Make a million, 20% would still be 10 times more than that, taxes paid by them, $200,000. Make only $20,000, pay only $4,000 taxes. Why should the percent go way up because someone may have worked hard, was smart, or got lucky, whatever. A flat tax is needed to be fair imo. You make more, you pay more taxes with a flat tax, exactly as much more as the percent of what you made would reflect. And no tax breaks. Stream line it all. I have no clue why it would not work. Cut out all these classess and brackets imo.
Cheryll April 06, 2012 at 11:58 PM
Thanks Emily! I appreciate how well you added info needed: a 50% reduction in the PAYROLL TAX, a tax holiday on PAYROLL GROWTH, and an extension of 100% expensing into 2012. I think that a great thing to add to this Jobs Bill, would be something that gives some relief to existing small businesses-if there isn't already something out there. Like anything else there would be ways to qualify for this assistance and it might be sunsetted so as not to add enormously to the federal deficit. But as an encouragement to grow NEW small business THIS Jobs Bill makes sense . It's the "deregulation" they keep clammoring for.
Bill Schilz April 08, 2012 at 01:16 PM
As I read more about the bill, it quickly addressed one of my issues (due diligence), but it eliminated 90% of potential investors! Accredited investors already have access to new business deals and I don't think this act is going to make a significant difference in raising capital. Here's why... "In about 90 days the Access to Capital for Jobs Creators Act should go into effect, allowing companies to tell the public that they are raising capital. In the past, this type of solicitation was illegal and could exempt the company from raising money privately. Now, startups should be able to solicit their deal, which could mean that more investors will be able to hear about it. The caveat is that only accredited investors can participate in those deals where the company is soliciting. In other words, this will only apply to investors who fall into the following categories. Your net worth is more than $1 million, excluding your home You have $200,000 in new income for the last two years and a reasonable expectation to make $200,000 in the current year You have $300,000 in household income for the last two years and a reasonable expectation to make $300,000 in the current year."

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