Crowdfunding:  Congress is permitting companies to offer securities over the internet, though with limitations.  Companies are allowed to raised up to $1 miollion per year without SEC registration, through crowdfunding techiniques.  Individuals are limited to invest up to $2,000 or 5 percent of their income/assets if below $100,000 or $10,000 or 10 percent of income/assets if above $100,000.  

The issuer (company raising the funds) must utilize a broker or "funding portal" as an intermediary that, in turn, must register with the SEC and any applicable self-regulatory organization such as FINRA.  There are investor education requirements, including that (1) an investor acknowledge that they understand that this is a risky investment and (2) that they may lose the entire investment and (3) they can afford to lose the entire investment.

Crowdfunding portals will have to determine how to execute a profitable business on $1 million transactions and the accompanying requirements for investor education, protection, company due diligence and risk disclosure requirements.  In short, the portals will be required to do a lot of work to protect the investors against fraudulent investments, and protect sensitive investor data.  How to do it profitably?

Reporting companies and number of shareholders:  The JOBS Act has increased the number of shareholders to 500 unaccredited investors or 2,000 accredited and unaccredited investors, excluding employees, before a company must commence publicly reporting their financial results.  This is known as the Facebook ("FB") provision, as FB is known to have gone to great lengths to limit the number of investor entities (as opposed to investors) in order to avoid the status of a reporting company.

SOX Requirements:  While the sizzle may be in the crowdfunding legislation, we believe that the importance of the JOBS Act is in the legislation that applies to companies under $1 billion in market capitalization.  Reducing the requirement for small companies to comply with SOX is huge.  On IPO, the audit requirement is two years as opposed to three; there is a five year on-ramp, after IPO, to full SOX compliance.

Other:  Other notable points is the permittance of web-based solicitation for investments,  allowing for research reports to be issued on companies immediately following an IPO, or public companies in registration with the SEC, and confidential filing of an IPO with the SEC.

Summary:  On the whole, the JOBS Act is ten years overdue.  It's major feats are (1) allowing the SEC to tiptoe into the internet age with its crowdfunding provisions, and (2) reducing the impact of Sarbannes Oxley on smaller cap companies.   The JOBS Act moves us forward, and has the potential to greatly increase investor activity in emerging growth companies.

The best known consumer company pursuing an IPO is Annie's Inc. with the symbol BNNY–as in Annie's bunny logo.  Annie's is one stock my step-daughter should own.  She is addicted to their macaroni and cheese.  It's her favorite dinner before swim practice.  Easy to make, flavorful, and who doesn't love cheese and pasta?  Take a look at the road show, which references almost every successful retail and 'natural' publicly owned company.  

Annie's is raising $75m, between 16 and 18 per share, for a total valuation after the IPO of $283 million.  Of the approximately 5 million shares being offered, four million are for selling shareholders–a sure sign of a bull market.  The underwriters are Credit Suisse and J.P. Morgan, William Blair, RBC Capital Markets, Stifel Niclaus Weisel, and Canaccord Genuity.  

Another favorite is CafePress Inc.  I am a customer of their products, including a 'love a pug' license plate holder.  CafePress is an internet retailer of customized products for everything from T-shirts to water bottles.  The company is raising $81 million at a $272 million valuation.  The underwriters are J.P. Morgan, Jeffries, Cowen, Janney Montgomery Scott and Raymond James.

Another notable company is Millennial Media Inc., which provides technology and services for delivering advertising over mobile devices.  Millennial is raising $102 million at an approximately $750 million.   Revenues last year were $100 million, with profitability in the fourth quarter.  Millennial's sell is their top tier customer set, and the huge growth of the mobile space.  Underwriters are Morgan Stanley, Gldman, Barclays Capital, Allen & Company and Stifel Nicolaus Weisel.

Check in at the end of the week.  We are hopeful that the market's route on Friday does not halt the march of these companies towards their IPOs.

It's a dicey bet, but what does either company have to lose at this point?

You ask, what is Path.com.  It's a smartphone/mobile app, that is a more intimate FaceBook.  It has struck a chord with people.  Path.com is

 a "Smart Journal" that's with you everywhere you go, posts entries without your effort, combines photo, video, music, people, places and text, and most importantly includes your  loved ones.  Path upholds the expectations for privacy of both the mobile phone, the journal, and the personal network.

What's most impressive is how Morrin has risen from the ashes of v1.0 and seems to have hit a home run.  Jason Calacanis, host of This Week in Startups and CEO of Mahalo, the "knowledge sharing" video website wrote a remarkable blog on Path.com's ugly duckling transformation entitled "Never Give up, Never Surrender" .  He ends with:

If you're running a startup that's an absolute disaster.  If your product sucks and the early adopters have left.  If you've been beat up and dragged through the mud, and if the world has counted you out, consider yourself blessed!

The precursor to kicking ass is getting your ass kicked.

Congratulations to the Path.com team on brushing themselves off and creating, because in life you're either creating or you're waiting.

It's clear from the emotional tone of the blog that Calacanis has been there and lived that movie.

Amazingly, the members of the Super-Committee thinks their actions, or rather inactions, are disconnected from Wall Street (http://on.wsj.com/v5SrZe).  Rather, they believe the market is swooning over the European situation.  Nobody said you need brains to go to Washington.

Shareholders will continue to want exits, so it's a good time to start the M&A process–knowing it won't come to fruition for at least six months, and most likely longer.  But, if you're currently fortunate enough to be in negotiations, you can assume that Congress has just added another four to six weeks to your closing date.  Assuming the deal will not be renegotiated, and that it will happen.

While Groupon's IPO was very successful, closing up 31 percent the first day of trading, it is in a sense. a bull market deal.  Two class stock offerings are by definition bull market deals.   In the IPO, Class A, which was offered to the public, has one vote per share, while Class B has 150 votes per share.  Typically, the market frowns upon two classes of stock, which tends to be used when a company is controlled by a family or some other dominant organization.

There is hope of more:  Yelp is rumored to be eyeing a debut, and Angie's List and a Groupon look-a-like, Shou, are in the que.  

I have always heard from the skeptics that Groupon would be squeezed out, as the retailers were becoming less enchanted by the high costs of the promotion, whereby they see little to no revenue from the promotion.  However, one observer noted that Groupon is an inexpensive a market research tool for small businesses, claiming this is by far the least expensive method of gathering market data on a market and customer base.  Which may explain why one of Groupon's investors, Accel Partners, is raising a $100m "Big Data" fund.

This thought gives one pause in considering the possible strategic directions and acquisitions in this product class, for or by them.  

True, most businesses, if traded separately, do result in higher valuations, such as conglomerates or mutual funds.  However, NFLX simultaneously made the product 60 percent more expensive, and less convenient to the customer.  Lose-lose.  This was not lost on Wall Street, which promptly rewarded Netflix with a decline in stock price from a high of 294 in July to 111 today, three months later.  That's a loss of close to $10 billion in market value.  Ouch.

And it's not as if Netflix has no competition.  There are plenty of giants nipping on its heels:  cable companies, Amazon, iTunes, Walmart, Blockbuster.  This sort of imperious, unilateral, ill-advised decisions are what competitors dream about.  And capitalize on.  If I were Jeff Bezos, I would immediately add a DVD service to my streaming offering, and look to bring Netflix to its knees.

Reid Hastings seems to have dug in his position.  He is right long-term, but he is early.  There are a lot of moves that will be played out in the marketplace before the DVD becomes the dinosaur.  Being early is the same as being wrong.