Journal of Financial and Quantitative Analysis 2026
Does General Solicitation Improve Access to Equity Capital for Small Businesses? Evidence from the JOBS Act
Abstract
Under Title II of the Jumpstart Our Business Startups Act, firms can sell private placement securities to the public via general solicitation (GS) or privately (non-GS). We find that equity offerings under GS tend to be riskier than under non-GS. After accounting for selection, GS issuers are less likely to succeed in i) raising capital, ii) getting venture capital (VC) funding, and iii) exiting via IPO or mergers and acquisitions, and incur substantial brokerage costs for advertising and verifying investor accreditation. However, GS appears to help new entrants and offerings that use registered brokers. The success of Form D financing improves future VC financing and exit outcomes.
- DOI
- 10.1017/s0022109025102470
- Pages
- 1-43
- Language
- en
- Sources
- openalex crossref