"It's not the JOBS Act itself but rather the SEC's failure to implement rules in the JOBS Act that could be beneficial to startup and early stage companies, despite specific time deadlines in the Act itself, that has frustrated Congress' intention in the JOBS Act," Williams said.
The intricacy of this game-of-charades slowdown is classic Washington.
"The battle is more between the wishes of the legislative branch and the regulatory bureaucracy," said Grafton "Cap" Willey of CBIZ MHM, a New York-based public accounting provider and management consulting firm. "Congress and the President have seen the fact that raising capital for small business has been a major problem since the passage of Sarbanes Oxley, and they tried to address it with the JOBS Act." The SEC, under the leadership of Mary Shapiro, was not enthusiastic about the concepts and has dragged its feet on implementation. The state regulators do not like the bill because their authority is superseded in many cases by the bill.
"The pessimism revolves around whether or not the regulations when issued will be designed with enough flexibility to make the JOBS Act work or whether they will be so restrictive that they are designed to kill it," Willey said. "The lines are drawn between the people that recognize that small businesses need investment capital, and those willing to make such investments recognize the risks and rewards that these types of investments are, and those people that are paternalistic and believe that most investors are not smart enough to make these investment decisions and need governmental protection."
But Albright says that casting crowdfunding in a beguiling light is unfounded.
"There are a lot of skeptics out there who view crowdfunding as the next penny stock market," Albright said. "That couldn't be farther from the truth. People who are looking at crowdfunding who are looking at it through viewing it the old Wall Street way. Wall Street is undergoing a dramatic transformation. Crowdfunding is basically based on the same principles that built America in the first place--allowing Americans to invest in the ingenuity of their fellow Americans."