Economics 101

Joseph W. Bartlett

The question arises in my mind whether a summary index could be organized to track and elevate it to its proper place and level of influence that portion of the U.S. economy composed of the contributions to GDP and other economic indicators from the activities of emerging growth companies (called “EGCs” or “gazelles”) and their principals, the index helping all hands, including the Fed and Treasury economists, to adjust their view of economic growth in the U.S. to take into account small business creation and operations as a vital element of the economy, an element which often is overlooked when forecasting overall GDP and constituent elements such as job creation. As a business/academic colleague of mine likes to say, you can only measure what can be measured. The question is whether one can measure the impact of the start-up economy once one is shown the ropes, so to speak, and to adjust the snapshots and forecasts of U.S. growth accordingly.

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SEC Approves Final Rules for Regulation A+

Guest post by Esuga T. Abaya, Julia D. Corelli, Robert A. Friedel – Pepper Hamilton LLP

On March 25, the U.S. Securities and Exchange Commission (SEC) adopted final rules amending Regulation A to implement the provisions of Section 401 of the Jumpstart Our Business Startups Act (JOBS Act). [1] The new rules confirm most of the rules that had been proposed by the SEC in December 2013.

Regulation A+, as the amendment has been called by market observers, expands the current Regulation A exemptions. All offers and sales require registration of the securities offered under the Securities Act of 1933 (Securities Act) unless an exemption applies. Regulation A is such an exemption and, consistent with the intention of the JOBS Act, is an attempt to make it easier for small businesses to raise capital. By adopting these new rules, the SEC intended to “craft a workable revision of Regulation A that would both promote small company capital formation and provide for meaningful investor protection.”

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