What does the JOBS Act encourage regarding investment in startups?

The JOBS Act, officially known as the Jumpstart Our Business Startups Act, was enacted to spur job growth and provide easier access to capital for startups and small businesses. It fundamentally encourages diverse funding methods through relaxed regulations, making it easier for entrepreneurs to seek investment from a broader base of investors.

This legislation allows for crowdfunding and other innovative funding approaches that were previously restricted under traditional securities laws. By lowering barriers for non-accredited investors to participate in startup funding, the JOBS Act democratizes the investment landscape, allowing a wider variety of investors to contribute to emerging businesses. Additionally, it lessens the regulatory burdens associated with raising capital, which enables startups to focus more on their growth and operational activities rather than navigating complex legal requirements.

In contrast, the other options either limit the scope of investment types or promote scenarios that do not align with the intention of the JOBS Act, which seeks to enhance access to capital rather than restrict it.