How We Can Move Entrepreneurship Forward

When the JOBS Act was passed in April 2012, many of us in the social entrepreneurship community were excited!

It seemed as if a whole new economic structure would form underneath rusty old 20th century capitalism. Finally, the "trickle down" concept of 1980s Reaganomics would be replaced with a millennial-worthy "trickle up" version. The new world looked promising!

We waited patiently for the Securities and Exchange Commission (SEC) to do its job and structure guidelines to protect the average investor -- those of us with less than $1 million net worth or under $200k in annual income (a.k.a. 99 percent). We are still waiting!

Signed into law 18 months ago, the bill was scheduled to be implemented by September 2012. Yet one year later, official government policy makers continue to drag their feet.

The first significant progress made on the law arrived this summer due to the proactive agenda of Mary Jo White, the SEC's new chairwoman. Mary Jo put the JOBS Act back on the table resulting in an important new ruling on Title II which according to Forbes:

lifts the longtime ban on public solicitation and creates a new type of offering called 506(c), that essentially allows companies, for the first time in over 80 years, to freely advertise that they are fundraising to the general public.

While that is progress, we are still waiting for the SEC to allow "non-accredited investors" to join this emerging market of new companies. With Mary Jo on the scene pushing the bill forward, it seems more hopeful than ever that Title III will pass soon opening up the investing floodgates to Main Street America.

In the ultimate irony, however, the 99 percent are free to lose money through exploitive mortgages, housing market and stock market bubbles... think 1987 (Stock Market crash), 1990 (housing market bubble), 1998 (Long Term Capital crash), 2000, (Dot Com bubble), 2007-2010 (housing market crash), 2008-2009 (banking collapse), 2008-2010 (credit market crash & financial crisis)...resulting in plunging net worths and massive job losses.

Yet while these economic atrocities occur with great regularity, anyone of us can continue to invest freely and easily in large "public" companies only to find our shares plummet or disappear. (Think Enron, WorldCom, Lehman Brothers). Or we can freely invest in our homes whose values are determined by the ever-changing dynamic of "consumer confidence," and lose our shirts (and roofs) in the process.

The question remains:

What are policymakers afraid of by forging ahead with the JOBS Act? Perhaps, it's simply fear of the unknown. The new economy, despite the SEC's recalcitrance, is emerging rapidly in the shadow of Wall Street. For traditionalists, this brings up uncomfortable questions:

What will this new economy look like? Will the old economy still be able to hold onto the purse strings for middle and working class America?

For many citizens, the new economy poised to emerge with "free market" equity crowdfunding puts much needed capital in the hands of middle class investors and bootstrapping entrepreneurs. Traditional "free marketers" should understand this more than anyone else and get out of the way.

Naturally, caution is necessary in the creation of new credit markets. Yet after two years of high unemployment and continuing recession, the time has arrived to move economic democracy forward by supporting the American entrepreneurial revolution growing by leaps and bounds behind the scenes. Unlike the industrial and financial revolutions of the last two centuries that spurred growth mainly for bankers and moguls, this emerging credit revolution leads the way to an economy of the people, by the people, and for the people.

It won't replace the old economy; it will simply establish a new dynamic and more equitable one alongside of it. That economy would help all Americans.