# Office of the Advocate > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/agency%3Asec%3A448fa56f7d1bb76a ## Record - **Collection:** Agency decision - **Document type:** Agency decision ## Text Staff Report from the Office of the Advocate for Small Business Capital Formation FISCAL YEAR 2025 SMALL BUSINESS ADVOCACY OFFICE This is a report by the staff of the U.S. Securities and Exchange Commission Office of the Advocate for Small Business Capital Formation. The Commission has expressed no view regarding the data, analysis, or statements contained herein. i | S E C O FFIC E O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON OPENING MESSAGE ABOUT THIS STAFF REPORT This Staff Report has been compiled by the SEC Office of the Advocate for Small Business Capital Formation. The SEC Small Business Advocate Act of 2016 added Section 4(j) to the Securities Exchange Act of 1934 (the Exchange Act) to establish within the Commission the Office of the Advocate for Small Business Capital Formation (the Office) to be headed by the Advocate for Small Business Capital Formation (the Advocate). Section 4(j)(6)(D) of the Exchange Act provides that the Advocate shall submit an annual report on the activities of the office directly to the applicable committees of Congress. Stacey Bowers served as the Advocate throughout Fiscal Year 2025, and in October 2025, she departed the SEC. Since the Commission does not presently have an Advocate to submit a statutory annual report to Congress pursuant to Section 4(j)(6)(D) of the Exchange Act, the staff in the Office have prepared this report to be released by the Commission. This Staff Report is being issued in lieu of the annual report on activities described in Section 4(j)(6) of the Exchange Act. This Staff Report presents data across three company lifecycle stages to provide a fulsome picture of what is happening in the small business marketplace and highlights the Office’s work over the last year. The Office hopes that this Staff Report will help small businesses, investors, and all who support them to understand how capital is being raised and invested, and by whom. The Office staff would like to thank Stacey Bowers for bringing her experience, perspective, and passion to the Office. During her time as the Advocate, Stacey contributed to the growth of the SEC’s online educational resources that seek to empower entrepreneurs and their investors, expanded the Office’s listening sessions with leaders of small business capital formation around the country, and gave a voice to entrepreneurs and investors by advocating for policy changes on their behalf. Thank you, Stacey, for your public service and tireless support for our small but mighty small business team. STA FF R EPORT: FI SCA L YEA R 2025 | i CONTENTS MISSION: Who We Are 1 DATA: State of Capital Formation 4 Small and Emerging Businesses and Exempt Offering Data 32 Mature and Later-Stage Businesses 47 Initial Public Offerings and Small Public Companies THE OFFICE: What We Do 58 COMMITTEE: Highlights ENDNOTES: All the Details 72 78 STA FF R EPORT: FI SCA L YEA R 2025 | iii MISSION Who We Are T he Small Business Advocacy Office was established in January 2019 via the bipartisan SEC Small Business Advocate Act of 2016 to advance the interests of small businesses and their investors at the SEC and in the capital markets, from early-stage startups raising initial capital, to later-stage private companies whose founders and investors are seeking liquidity, all the way to smaller public companies. As part of its statutory mission, the Office seeks to identify problems that small businesses have with securing access to capital, including any unique challenges faced by minorityowned, women-owned, rural, and natural disaster area small businesses and their investors.1 We advocate for small businesses and their investors in capital raising by: Engaging through outreach and education Analyzing Helping the impact of rules and regulations navigate capitalraising pathways We engage with small businesses and their investors from around the country to hear their perspectives on issues facing the small business ecosystem, from policy, to changing trends in capital raising, to the complexities of the capital-raising regulatory framework, to unique challenges and opportunities of different demographic groups and geographic regions. The insight we gain from our events and conversations with small business marketplace participants provides timely, practical feedback to inform the Commission’s policymaking as well as the Office’s further outreach and educational efforts. STA FF R EPORT: FI SCA L YEA R 2025 | 1 DATA State of Capital Formation 2 | SE C O FFICE O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON Why data? We seek to provide a comprehensive snapshot of the state of U.S. small business capital formation, bringing together many important pieces of the capital formation story into one resource to aid in evaluating the current flow of capital between investors and small businesses. Data reflecting the successes and challenges in small business capital raising supplements the feedback and other anecdotal evidence our office receives throughout the year. Informed by this data, we can better identify what tools, strategies, and approaches would be most helpful in crafting policy solutions and developing educational resources. The data provided in this report is derived from public filings with the SEC, as analyzed by the SEC’s Division of Economic and Risk Analysis (DERA), and supplemented with data and analysis from third parties. Where to start? Mature and later-stage businesses Small public companies COMMON FUNDING SOURCES Self-funding Grants Loans Friends and family Crowdfunding Angel investors Incubator/Accelerator Pre-seed and seed Venture capital (VC) funds Corporate venture capital Family offices Initial public offerings (IPOs) Other registered offerings Exempt offerings (e.g., private placements or offshore offerings) Businesses range from small businesses funding early operations to high-growth startups raising capital to launch prototypes and products. These businesses are generally growing and looking for larger amounts of capital to fund operations of scale, ventures into new product lines, and preparation for public markets. These later-stage businesses have access to a larger pool of capital, enhanced liquidity, reputational benefits, and are subject to rigorous SEC reporting requirements. Given the wide-ranging options for funding, the top industries vary based on funding source. Software Pharma and Biotech Commercial Products and Services Health Care Consumer Goods and Services IT Hardware Health Care Technology Manufacturing Banking and Financial Services Business Services TOP INDUSTRIES RAISING CAPITAL2 Small and emerging businesses BUSINESS STAGE LIFE CYCLE STAGE To allow small businesses, investors, and market participants to find the data that is most relevant to them we have organized this report by life cycle stage of the business. STA FF R EPORT: FI SCA L YEA R 2025 | 3 Small and Emerging Businesses and Exempt Offering Data T his stage of the company lifecycle includes both small businesses in the earliest stages or whose operations may not fit the typical target of VC fund investments, as well as high-growth startups that are seeking to raise capital to get off the ground and launch early prototypes.3 Why is access to capital for small businesses so important? Small businesses remain central to our society, economy, and the American dream. The U.S. is home to 36.2 million small businesses From 2023 to 2024, U.S. small businesses created (46% of U.S. private sector employment).4 nearly 9 of 10 net new jobs.5 54% of people are thinking about starting a new business in 2025.6 82% of Americans view entrepreneurship as a good career choice.7 However, the cost to start a business often prevents entrepreneurs from achieving this dream. Money is the biggest barrier to entrepreneurship.8 4 | 48% of entrepreneurs stated they would start a business if they had more money.9 S E C O FFICE O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON Early-stage entrepreneurs continue to face financial challenges and need capital. Ongoing access to capital remains a barrier for entrepreneurs. 94% In 2024, of small businesses experienced financial challenges, including:10 80% In 2025, over of early-stage businesses experienced macro-economic challenges related to:11 General economic uncertainty Rising costs of goods, services, and/or wages Paying operating expenses Uneven cash flow 89% Access to capital 84% Tariffs 83% Fundraising landscape 81% Access to affordable capital remains a challenge for entrepreneurs. 81% of small business owners who applied for a business loan or line of credit found it difficult to access affordable capital.12 40% of small businesses seeking financing and credit products sought less than $50,000 in capital.13 Access to Capital Over the last decade, the number of small banks decreased by 49%.14 Entrepreneurs reported access to capital as the #1 obstacle limiting growth in their business.15 “ One of the most important steps for the survival and growth of a new business venture is securing start-up capital. NORC AND KAUFFMAN; EPOP 16 STA FF R EPORT: FI SCA L YEA R 2025 | 5 Why were small businesses seeking financing?17 56% Meet operating expenses 46% Expand business or pursue new opportunity 40% Have available credit Repair or replace assets 27% Businesses with revenues of $25,000 or less Refinance or pay debt 27% sought financing primarily for this reason.18 In addressing financial challenges, more small businesses relied on personal funds and cash reserves than used external funds.19 7% 55% Used personal funds 51% 48% Used cash reserves Raised prices 38% Used external funds with repayment 36% Cut staff, hours, or downsized Received grants or donations 24% Made late or no payment For small businesses that seek external funding, there are a variety of pathways, and entrepreneurs often combine multiple capital strategies to fund their business.20 LOAN Business credit cards (used by 16% of entrepreneurs) Bank loans (used by 14% of entrepreneurs) Friends and family loans (used by 6% of entrepreneurs) Venture Capital (used by 4% of entrepreneurs) Grants (used by 3% of entrepreneurs) Crowdfunding (used by 2% of entrepreneurs) 6 | Government loans (used by over 13% of entrepreneurs)21 S E C O FFICE O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON For all pathways, many of the small businesses that sought funding in 2024 did not receive all of the funding they requested.22 Of the roughly 25% of small businesses that applied for a loan or line of credit, 72% received some funding, and 43% received the total amount requested.23 Of the roughly 25% of small businesses that applied for venture capital, 17% received some funding, and 14% received the total amount requested.24 Of the roughly 25% of small businesses that applied for a grant, 12% received some funding, and 8% received the total amount requested.25 Of the roughly 20% of small businesses that applied for crowdfunding, 11% received some funding, and 7% received the total amount requested.26 How does access to startup capital change between first-time and experienced founders?27 First-tme founders’ funding applications were 8% less to receive any amount likely of requested funding. “ The strength of the entrepreneurial community lies in its ability to adapt and innovate. By fostering financial strength and removing barriers to growth, we empower entrepreneurs to thrive and create lasting opportunities for the entire community. SHANNAN HERBERT, WACIF28 STA FF R EPORT: FI SCA L YEA R 2025 | 7 Many entrepreneurs need support and networks to grow and scale their businesses. Startups benefit from technical support when seeking funding. 64% of small businesses need technical assistance to access capital.29 of small business owners did not apply for financing because they didn’t know where to start.30 11% Entrepreneurs with strong networks have more success.31 Startups with well-connected lead investors have lower failure rates.33 20% Founders plugged into mentor networks tend to have more resilient business plans and higher confidence when approaching lenders.32 19% 18% 10% 9% 7% Series A Series B Series C 16% 4% Series D+ Failure rate of startups led by well-connected investor Failure rate of startups led by peripheral investor Strong investor networks benefit both founders and investors.34 Investors’ networks benefit startups through their connections to founder networks, potential customers, and investors. 8 | Investors with strong networks are more likely to have a greater deal flow and receive early tips about potential startups. SE C O FFIC E O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON Entrepreneurial support organizations, such as accelerators, benefit the larger ecosystem.35 Geographic areas that added a new accelerator also saw increased VC deal flow.36 Leveraging an accelerator’s platform reduces search costs for startups seeking investors and investors seeking startups.37 Accelerators help screen, mentor, coach, and build networks of startups, reducing the information imbalance.38 Startups that graduated from an accelerator or incubator have a higher funding rate (5.4% compared to 2.9% for those who did not attend).39 In 2024, 25% of all VC deals were with a business that participated in an entrepreneurial support program.40 More than 13K businesses from entrepreneurial support programs across the country have raised over $200B in VC funding over the last 15 years.41 What do entrepreneurs prioritize in selecting an investor? 60% of entrepreneurs prioritized investors that provided thought partnership or tangible support, such as customer introductions.42 16% of entrepreneurs prioritized investors with a name-brand firm, the largest check size, or the best deal terms.43 STA FF R EPORT: FI SCA L YEA R 2025 | 9 What is the role of an angel investor? Angel investors and accredited investors: What do these terms mean? Angel investors are generally high-net-worth individuals who invest their own money directly in emerging businesses. Most angel investors are accredited investors, and many are current or former entrepreneurs themselves.44 For companies, the accredited investor definition may determine who is in their pool of potential investors. For investors, the accredited investor definition may determine whether they are eligible to invest. What does the pool of accredited investors look like? Those individuals qualify based on: Household net worth 10% 13% Household income 3% Personal income 3% of the U.S. population qualifies as an accredited investor.45 Specialized expertise 2% Accredited investors are nearly 3X more likely to be interested in investing in new or private companies as compared to the total U.S. population.46 10 | SE C O FFICE O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON Angel investors are a vital component in creating the next generation of startups. 78% of angel deals invested in 25% of successful startups were funded by angel investors47 first-time CEOs48 $17.9 billion in angel investments in 2024 (3.1% decrease from 2023)50 56% of angel deals were in seed rounds and 48% of angel dollars went to seed companies.49 445,535 active angel investors in 2024 Angel Investors (5.5% increase from 2023)51 Each angel investment created 4.1 jobs52 M OR E I NF received angel funding in 2024 (consistent with 2023)53 P ES O TY RS SC N R FO O A 55,346 businesses OF INVES T STA FF R EPORT: FI SCA L YEA R 2025 | 11 What is happening with seed fundraising? A pre-seed or seed round is typically a company’s first funding round.54 This round may include funding from friends and family, angel investors, or early-stage funds. Capital at this stage is often used for product development and market research.55 Diving in further, what do typical pre-seed and seed rounds look like?56 Pre-Seed Typical amount raised Seed $50,000 – $250,000 $1M – 5M Friends and family, crowdfunding, angel investors, pre-seed and Investor profiles seed VC funds, incubators, and accelerators. Idea validation, team formation, initial prototype, market research, Typical stage/use of funds development of a minimum Angel investors, pre-seed and seed VC funds, incubators, accelerators, and seed funds. Product development, testing, and refining, market fit testing, marketing development, documented viable product. traction and milestones. Mirroring overall market trends, seed deals increased in size. Average and median seed deal values57 $6.8M Average Deal Value $4.8M $4.1M $3.3M $2.3M $2.8M $3.0M $4.7M $3.1M $3.6M unds ur seed ro fo re e w ere the In 2015, th on. This past year, li il over $25 of $25 m d rounds e e s f o r e X.58 numb creased 10 million in Median Deal Value 2021 2022 2023 2024 2025* *As of June 30, 2025 As seed rounds increased, so did the time between seed and Series A.59 2.1 years The median time between raising a seed round and Series A increased to 2.1 years in 2024—84% longer than in 2021 (up from 1.2 years in 2021). 12 | S E C O FFICE O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON Overall, the share of pre-seed and seed deals across VC declined.60 3,922 3,635 In the first half of 2025, pre-seed and seed deals represented 3,739 3,072 2,817 2,466 28% of VC deal count 2,580 (down from 34% in 2024 and 35% in 2023), and 2,401 1,866 6% of VC deal value (down from 8% in 2024 and 10% in 2023). $9B $10B $15B $10B $8B $8B $8B $8B H1 H2 H1 H2 H1 H2 H1 H2 2021 2022 Deal Value 2023 2024 $9B H1 2025 Deal Count What does it take to raise a seed round?61 Contacting 200+ investors Raising a $3 – 4 million seed round can mean that founders are: Conducting 60+ first meetings Having 20 – 30 follow-up meetings Advancing 5 – 7 into diligence Resulting in 1 – 2 viable term sheets “ The asset class has grown from a select few seed-stage firms writing small checks, to thousands of seed funds that back fledgling startups. Early-stage funds and multistage funds also began investing at seed, with some writing larger checks at this stage. With that growth, the category of seed investment also became elastic and grew to include pre-seed, seed, and pre-Series A. GENE TEARE, CRUNCHBASE62 STA FF R EPORT: FI SCA L YEA R 2025 | 13 What regulatory pathways have companies (excluding pooled funds) been using to raise capital?63 How have companies been using exempt offering pathways? An exempt offering—sometimes referred to as a private offering—is commonly used to describe the offer and sale of securities that is exempt from registration under the Securities Act. Each exemption has specific requirements that a company must meet.64 Exempt Offerings Rule 506(c) Rule 504 General Solicitation Offerings Limited Offerings $24 billion $300 million Other Exempt Offerings (Reg S and Rule 144A) $1 trillion Rule 506(b) Regulation A Private Placements Mini-IPOs Crowdfunding $378 billion $1.2 billion $235 million How have companies been using registered offerings? A registered offering—often referred to as a public offering—is commonly used to describe an offer and sale of securities that has been registered under the Securities Act. Companies that would like to offer securities to the public through a registered offering must file a registration statement and may not sell the securities until the registration statement is effective.65 Registered Offerings Other Registered Offerings $1.4 trillion Initial Public Offerings $47 billion 14 | S E C O FFICE O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON What regulatory pathways have pooled funds been using to raise capital? What has been happening with pooled funds? A pooled investment vehicle is an entity—often referred to as a fund—that an adviser creates to pool money from multiple investors. Each investor makes an investment in the fund by purchasing an interest in the fund entity, and the adviser uses that money to make investments on behalf of the fund. Investors generally share in the profits and losses in proportion to their interest in the fund.66 There was $126 trillion invested in the U.S. capital markets as of the end of 2024, distributed as follows:67 $40 trillion $31 trillion $55 trillion assets invested in assets invested in assets invested in Registered Funds Private Funds Separately Managed Accounts d for accounte VC funds or n in assets $1.7 trillio e overall 1.3% of th .68 al markets it p a c . .S U How have pooled funds been using exempt offering pathways to raise capital?69 Other Exempt Offerings (Reg S and Rule 144A) $169 billion Rule 506(b) Private Placements $1.9 trillion Rule 506(c) General Solicitation Offerings $100 billion How have pooled funds been using registered offerings to raise capital?70 Registered Offerings by pooled funds Total Flows into Registered Funds (measuring the movement of cash into funds) $10.3 trillion Initial Public Offerings Other Registered Offerings $11 billion $11 billion Net Cash Flows into Registered Funds $478 billion STA FF R EPORT: FI SCA L YEA R 2025 | 15 How much did U.S. public and private companies (excluding pooled funds) raise from investors?71 U.S. private companies raised 36% ($840 billion) U.S. public companies raised of all capital raised by U.S. companies. 64% ($1.5 trillion) of all capital raised by U.S. companies. How have different industries been using the top 3 offering pathways?72 Banking and Financial Services $577B Technology $205B $58B $134M Energy $200B $8B $31M $51B $129M Business Services $57B Manufacturing $135B $4B $150M Health Care $103B $23B $30M Real Estate $51B Hospitality, Retailing, Restaurants $147B $212M $51B $427M $30B $1B Registered Offerings 16 | Regulation D Regulation A S E C O FFIC E O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON What has been happening with Regulation Crowdfunding offerings? A Regulation Crowdfunding offering permits a business to offer and sell its securities to the investing public through crowdfunding. Crowdfunding generally refers to a financing method in which money is raised through an online platform, soliciting relatively small individual investments or contributions from a large number of people.73 Other 1% 58% of issuers were less than 3 years old.75 SAFE 25% Equity 43% Debt 31% 43% of crowdfunding offerings were for equity.74 The average length of an offering was around 6 months (with the median about 4 months).78 The average check size per investment was $1,500 (26% increase from 2023).80 778 388 722 357 269 262 713 281 8. 76 81% of issuers have assets.77 $114,000 was the median raise in 2024. $368,000 was the average successful campaign raised.79 Nearly 1 of every 2 investment 841 755 The average number of employees of an issuer was 728 checks was directed toward a 557 $1M or larger deal.81 225 Of businesses that completed at least one 308 successful crowdfunding offering H1 H2 2022 H1 H2 2023 H1 H2 2024 H1 2025 New Form C Filings New Form C Filings >$1.07M to $5M82 from May 16, 2016 through 2024: 0.25% completed an IPO, 2.2% were acquired, and 3.4% received VC funding. 83 STA FF R EPORT: FI SCA L YEA R 2025 | 17 What has been happening with Regulation D offerings? Regulation D is a series of rules that govern certain types of exempt offerings. The following exemptions are set forth in Regulation D: Rules 504 (sometimes called “limited offerings”), 506(b) (sometimes called “private placements”), and 506(c) (sometimes called “general solicitation offerings”). Each rule has specific requirements that a company must meet.84 Pooled funds accounted for most of the amounts raised under Regulation D, but a little less than half of the offerings.85 11,946 9,703 11,351 9,147 8,190 8,573 8,407 8,689 7,200 $1,013B $1,069B $1,527B $134B $165B H2 H1 $149B H1 2022 7,195 8,017 7,557 8,124 8,225 $899B $970B $890B $89B $93B H2 H1 2023 $265B $1,106B $138B H2 H1 2025 2024 Amounts Raised by Pooled Funds New Offerings by Pooled Funds Amounts Raised by Other Issuers New Offerings by Other Issuers Diving further into pooled fund offerings, the vast majority of capital is raised by 3(c)(7) funds, which are limited to investors that are qualified purchasers.86 7,231 4,883 3,831 3,620 3,807 2,759 2,900 3,016 4,034 4,116 3,331 3,365 3,899 3,115 $850B $977B $1,370B $906B $730B $845B $951B $55B $57B H2 $73B H1 $32B H2 $49B $31B H1 H2 $36B H1 2025 H1 2022 2023 Amounts Raised by 3(c)(1) Funds New 3(c)(1) Fund Offerings 2024 Amounts Raised by 3(c)(7) Funds New 3(c)(7) Offerings Over the past 3 years, operating companies raising capital under Regulation D were most often in their first few years of operations.87 82% 18 | of operating companies raising capital under Regulation D were less than 3 years old. S E C O FFIC E O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON What has been happening with Regulation A offerings? Regulation A offerings are sometimes called "mini-IPOs" and allow eligible companies to raise up to $20 million in a 12-month period in a Tier 1 offering and up to $75 million in a 12-month period in a Tier 2 offering through a process similar to, but generally less expensive than, a registered offering.88 The amounts and number of offerings have increased since the lows in the first half of 2024.89 190 164 174 165 149 145 88 $2.8B $2.3B 66 $2.0B $1.5B 19 H1 2022 25 H2 25 H1 2023 22 H2 96 80 77 71 57 $1.9B $1.2B 20 H1 2024 Amounts Sought in Qualified Offerings New Initiated Offerings Seeking $50M or Less ge check The avera d 2,300 an size was $ s g n ri ffe 95% of o 90 uity. q e re e w 56 $1.7B 25 24 H2 H1 2025 New Initiated Offerings New Initiated Offerings Seeking >$50M and $75M From June 19, 2015 through 2024, the vast majority of offerings under Regulation A were Tier 2 offerings.91 By amount sought, 93% of qualified offerings were Tier 2 offerings.92 By number of offerings, 81% of qualified offerings were Tier 2 offerings.93 Companies using Regulation A to raise capital tended to be relatively small and young.94 19 6.7 years $18.4M $1.9M Average number of employees: Average issuer age: Average total assets: Average revenue: 1 in 8 companies generated a net profit. 37% of offerings tested the waters. STA FF R EPORT: FI SCA L YEA R 2025 | 19 Founder and Investor Demographic Data95 Women continued to start small businesses and create jobs.96 OPEN 18% of women participate in 2 million U.S. businesses entrepreneurial activities.97 are women-owned or equally women- and men-owned.98 19 million people are employed by womenowned or equally women- and men-owned businesses.99 From 2019 to 2024, the number of new women-owned businesses grew by 17%.100 Women founders face challenges that can hinder expansion and growth.101 Access to funding Less established networks 20 | 66% of women entrepreneurs believe that access to capital is critical to their startup’s success.102 42% of women entrepreneurs who applied did not secure a bank loan.103 50% of women entrepreneurs struggle to find help to start their business.104 27% of women entrepreneurs lacked mentorship.105 SE C O FFICE O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON Why did founders not apply for financing?106 60% 48% 28% 12% 21% 9% Women-owned 9% 8% Men-owned Had sufficient financing Debt averse Discouraged High credit cost Women-owned businesses tended to seek less startup capital.107 A women-owned business is 1.8X more likely to seek $25,000 or less in funding.108 35% 19% 16% $25,000 or less 17% $25,001 – $50,000 20% 20% $50,000 – $100,000 Women-owned 16% 18% 18% 11% $100,000 – 250,000 2% $250,000 – $1M 9% More than $1M Men-owned While some women-founded businesses raised capital under Regulation Crowdfunding, those businesses raised a proportionally smaller amount of capital than companies with no women founders.109 However, only 34% 26% of new Regulation Crowdfunding deals had of the total amount raised under Regulation Crowdfunding went to teams with at least one woman founder.111 at least one woman founder.110 STA FF R EPORT: FI SCA L YEA R 2025 | 21 Women founders’ share of pre-seed and seed deals and capital remained small.112 Since 2021, deals with one or more women founders have accounted for 26% of all pre-seed and seed deals, and 25% of all pre-seed and seed capital. 113 Deals with women-only founders Deals with women and men founders Deals with men-only founders 5,219 5,036 3,917 $0.9B $1.1B $0.8B $0.6B $0.2B 1,602 $20B 1,455 1,013 553 503 2021 2022 Deal Value 353 293 2023 2024 3,867 110 $4B $4B 2025* 2021 2022 1,480 $14B 821 $3B $3B 2023 2024 $12B $13B 276 $6B $3B 2025* 2021 2022 2023 2024 2025* *As of June 30, 2025 Deal Count Small business ownership attracted founders across races and ethnicities.114 Percentage of small business owners by race and ethnicity, as compared to the U.S. population by race and ethnicity: 75% 18% 14% 9% 1.6% White (Consistent with population share) 22 | Hispanic/Latino (Below population share of 20%) African American/Black (Consistent with population share) Asian American (Above population share of 7%) S E C O FFICE O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON Native American/ Pacific Islander115 (Consistent with population share) Income levels may affect whether potential entrepreneurs are able to grow personal wealth and self-fund their business.116 Household income distribution and median household income by race and ethnicity117 16% 29% 10% 18% 24% 29% 27% 8% 8% 21% 19% Over $200,000 30% $121,700 $100,000–$199,999 Under $99,999 Median Household Income $92,530 $83,730 $70,950 57% 41% 82% All Asian American White $62,760 66% 71% $56,020 73% Native African Hispanic/ American and American/ Latino Alaska Native Black Access to banking and related financial services may affect founders’ ability to access startup capital.118 The percentage of unbanked adults has remained steady since 2021.119 2015 8% 2016 7% 2021 6% 2019 6% 2017 5% Unbanked rates by race and ethnicity.120 2023 6% 12% 2018 6% 2022 6% 2020 5% 2024 6% 13% 6% 6% 3% All White Asian Hispanic/ African American Latino American/ Black Of the businesses that sought financing, most sought less than $50,000.121 66% African American/ Black 33% 33% 65% Hispanic/Latino 28% 37% 62% Asian American 20% 42% 58% White Native American/ Alaska Native 24% 34% 43% 16% 27% Share of businesses that sought any amount of financing Share of businesses that sought $50,000 or less Share of businesses that sought more than $50,000 STA FF R EPORT: FI SCA L YEA R 2025 | 23 Many founders sought capital through a small business loan or line of credit, but the amount received varied.122 White 47% 26% 27% Hispanic/Latino 35% 32% 33% Asian American 32% 39% 29% African American/Black 27% 25% Received All 47% Received Most/Some Received None Why did founders not apply for financing?123 62% 45% 29% 5% 18% Already had sufficient financing White Asian American 33% 44% 12% clude: asons in Other re averse • Debt st credit co sing h • Hig fu n o c r o 4 ult ss12 • Diffic ro on p ce applicati Assumed would be denied financing Hispanic/Latino African American/Black A variety of founders participated in Regulation A and Regulation Crowdfunding offerings in 2024.125 African Hispanic/ Asian American/ Latino American Black 8% 11% 11% 24 | White 70% S E C O FFICE O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON Geographic Data126 Where are U.S. small businesses located? The following map illustrates the density of small businesses by state population and indicates the number of small businesses per 1,000 persons in that state.127 WA 89 MT 125 OR 98 ID 105 NV 110 WY 140 MN 97 SD 105 CO 124 CA 110 AZ 95 OK 97 TX 114 AK 106 GU 19 Less than 80 businesses per 1,000 persons IL 111 OH 93 KY 87 LA 111 PA 92 WV 67 MS 100 AL 89 VA 101 MD 112 CT NJ 105 117 DE DC 107 120 NC 101 TN 104 AR 95 GA 127 SC 98 FL 153 HI 100 80 – 95 businesses per 1,000 persons IN 86 NH 104 MA 107 NY 122 MI 97 MO 95 KS 93 NM 81 WI 84 IA 90 NE 97 UT 108 ME 114 VT 126 ND 99 PR 13 95 – 110 businesses per 1,000 persons 110 – 125 businesses per 1,000 persons VI 24 More than 125 businesses per 1,000 persons What key themes arise in supportive entrepreneurial ecosystems?128 Capital availability and homegrown investor communities Connections between education and the startupcommunity of employers and angel investors On-ramps and tools to attract new founders and plans to retain them Policy coalitions that support entrepreneurship “ Across geographies, success is patterned, not random. The metros that consistently turn ideas into firms do the same things well: they make capital navigable, put education assets to work, welcome talent so it’s day-one usable, and pair state policy with local execution, then amplify it all through networks and narrative. NASDAQ ENTREPRENEURIAL CENTER129 STA FF R EPORT: FI SCA L YEA R 2025 | 25 RI 105 Where did companies raise capital? The shading of each state shows the estimated total capital raised in the 12 months ended June 30, 2025, and the number indicates the total number of offerings in that state.130 69% of crowdfunding investments are distributed Did you know? outside of the top 10 crowdfunding cities.131 Regulation Crowdfunding WA 16 MT 1 OR 9 ID 3 NV 12 WY 2 MN 2 SD 1 CO 13 CA 130 AZ 7 WI 2 IA 1 NE 2 UT 4 OK 0 GU 0 NONE IL 18 OH 7 PA 42 WV 0 MS 0 LA 3 GA 3 AL 2 VA 13 PR 1 VI 2 $1 – $5 MILLION $500,000 – $1 MILLION WA 9 MT 0 Regulation A NV 9 MN 2 SD 0 CO 2 OK 1 TX 7 NONE 132 ME 0 IL 4 IN 2 KY 1 MS 0 AL 0 WV 0 VA 0 MD 0 CT NJ 1 1 DE DC 4 2 NC 3 TN 1 AR 0 LA 0 OH 1 PA 1 NH 0 MA RI 2 0 GA 3 SC 0 FL 20 HI 0 LESS THAN $5 MILLION 26 | 43 states. NY 5 MI 1 MO 0 KS 0 NM 0 WI 0 IA 0 NE 1 UT 6 AZ 8 GU 0 OVER $5 MILLION VT 0 ND 1 WY 0 CA 18 AK 0 CT NJ 11 10 DE DC 18 8 SC 5 A typical Regulation A issuer sought investors in ID 0 RI 1 FL 56 LESS THAN $500,000 OR 0 MD 6 NH 4 MA 21 NC 9 TN 4 HI 2 Did you know? IN 3 KY 8 AR 1 TX 36 NY 46 MI 6 MO 5 KS 2 NM 4 AK 0 ME 1 VT 2 ND 0 PR 0 $5 – $20 MILLION $20 – $75 MILLION S E C O FFIC E O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON VI 0 OVER $75 MILLION WA 3066 MT 45 Regulation D Offerings OR 213 ID 82 NV 339 WY 170 MN 335 SD 48 CO 885 CA 4383 AZ 381 OK 99 TX 2925 AK 11 GU 0 NONE IL 927 OH 473 WV 9 MS 34 AL 150 VA 475 NH 45 MA 1147 RI 31 CT PA 581 MD 356 NJ 514 439 DE DC 2140 161 NC 513 TN 307 SC 181 GA 553 FL 1720 HI 26 LESS THAN $1 BILLION IN 182 KY 87 AR 84 LA 58 NY 4100 MI 271 MO 174 KS 103 NM 29 WI 169 IA 112 NE 80 UT 446 ME 41 VT 158 ND 34 PR 95 $1 – $5 BILLION $5 – $20 BILLION VI 1 OVER $20 BILLION How have incubators and accelerators affected funding for the next generation of startups outside of traditional VC hubs?133 States outside of traditional VC hubs had a higher percentage of incubator- and accelerator-backed VC deals than hub states.134 Top 10 states135 5 5 5 5 5 Oklahoma Wisconsin Mississippi North Dakota Missouri 5 5 5 5 5 Alabama Maine Delaware Georgia Maryland “ There are a lot of wonderful ESOs across the country that each have their own flavors, and so that ability for them to give you that initial start, that introduction to a lot of other investors and mentors was critical for our success. ANDREW PRYSTAI, EVENT VESTA136 STA FF R EPORT: FI SCA L YEA R 2025 | 27 Rural small businesses are an essential part of rural economies and communities.137 18% of the U.S. population lives in a rural area. 15% of small employer businesses are in rural areas. Rural counties contributed 7.4 million people are employed 138 $2.2 trillion to U.S. GDP (as compared to $19.6 trillion contributed by urban counties).140 139 by small businesses located outside of metropolitan areas.141 “ Rural entrepreneurship remains a cornerstone of economic development, offering a pathway to prosperity and opportunity in areas that often face systemic barriers to accessing capital and resources. Declining access to community banks and persistent gaps in venture capital continue to limit the ability of rural entrepreneurs to launch and scale innovative businesses. AMANDA WEINSTEIN AND ADAM DEWBURY, CENTER ON RURAL INNOVATION142 Rural communities face unique challenges that affect their economic growth.143 Infrastructure challenges, including reliable internet access, transportation, and other services.144 Challenges navigating a complex web of public investment programs.145 Lower levels of financial resources due to lower population, lower incomes, and fewer investments by large companies and philanthropies.146 40% of rural households have an income of less than $50,000 compared to 33% of non-rural households.147 28 | Only 3% of all philanthropic dollars flow to rural communities.148 S E C O FFIC E O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON While the number of rural banks declined,149 small banks remained the primary financial services provider for rural small businesses.150 An existing relationship with a lender 50% was the top reason that rural small business owners pursued financing at a small bank.151 47% 32% 30% 10% Small Bank Large Bank 9% 6% 4% 3% Non-Bank Financial Company Credit Union Rural Small Business 7% None Urban Small Business Many rural small businesses sought funding through traditional financing, while a smaller share sought capital from investors.152 Rural businesses accounted for: Rural small businesses raised proportionately less capital.154 Rural small businesses’ share of total capital raised in exempt offerings (over 3 years):155 13% Regulation Crowdfunding 5% Regulation D 1% of the small businesses that applied for a loan, line of credit, or merchant cash advance.153 Regulation A 0.2% The vast majority of the capital rural small businesses raised from investors was under Regulation D.156 Capital raised in exempt offerings by rural small businesses over the last 3 years:157 Regulation Crowdfunding $38 million Over the last three years, Regulation D accounted for 99% about of the total capital raised by rural small businesses in exempt offerings. Regulation D $5.3 billion Regulation A $8 million STA FF R EPORT: FI SCA L YEA R 2025 | 29 How have natural disasters affected small businesses?158 45% 9% of the U.S. population159 lives in an area that was affected by a natural disaster over the last three years.160 of small businesses suffered natural disaster-related losses (up from 7% in 2023 and down from 14% in 2022).161 by s affected Businesse er ff u asters s natural dis indirect direct and labor including damage, , public isruption market d age, and ture dam 162 infrastruc ent. e displac m r e m to s u c More small businesses affected by natural disasters carried property and flood insurance than small businesses that did not experience natural disaster losses.163 Of small businesses that suffered natural disaster-related losses, 75% had property insurance 17% and had flood insurance (compared to 69% and 9%, respectively, for those that did not suffer losses related to natural disasters).164 Small businesses affected by natural disasters were more likely to seek a business loan. Small businesses affected by natural disasters were over 2X more likely to apply for an SBA loan (36% compared to 17% of those that were not affected).165 30 | Small businesses affected by natural disasters were 2X more likely to apply for and receive a friends and family loan (16% compared to 8% of those that were not affected).166 SE C O FFICE O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON Most small businesses affected by natural disasters applied for financing. 69% of small businesses that suffered losses from a natural disaster applied for financing (compared to 58% of those not affected).167 Small businesses in affected areas raised capital from investors under various pathways, but the vast majority of capital was raised under Regulation D.168 Share of total capital raised through exempt offerings by small businesses in disaster-affected areas over 3 years: Regulation Crowdfunding 51% Regulation A 41% Regulation D 34% Capital raised in exempt offerings by small businesses in affected areas over the last three years: Regulation Crowdfunding $372 million Regulation D accounted for about 99% of the total capital raised by small businesses in areas affected by natural disasters. Regulation D $193 billion Regulation A $1.5 billion STA FF R EPORT: FI SCA L YEA R 2025 | 31 Mature and Later-Stage Businesses C ompanies within this segment of the market are generally growing and looking for larger amounts of capital, for example, to fund operations of scale, to finance new product lines, and to prepare to access public markets. Most often, their investors are institutional in nature, whether VC funds, private equity funds, or crossover investors from the public market. How does VC work? Fundraising VCs typically raise funds via capital commitments from investors. The median size of a U.S. VC fund in 2024 was $21.3 million.169 VCs tend to invest in high-growth companies. Investment VCs deployed $215 billion across 14,320 deals in 2024.170 Company Growth Many VCs actively engage with their portfolio companies.171 Over 63% of VCs contact their portfolio companies at least once a week.172 VCs generally exit through an IPO, merger, or acquisition of the portfolio company. Exit A VC fund typically has a 10-year lifecycle baseline.173 Re-investment After proceeds are distributed to investors, many investors invest in new funds. The average time between fundraises was 2.1 years in 2024.174 32 | S E C O FFICE O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON How is VC investment activity changing? While overall deal volume decreased, overall deal value increased.175 9,875 9,760 From H2 2024 to H1 2025, the overall VC deal count declined by about 4% and overall deal value increased by 33%. 10,314 7,994 8,001 7,883 6,987 6,941 6,660 $194B $166B $163B $152B $122B H1 H2 H1 2021 $84B $91B H2 H1 2022 $73B $93B H2 H1 2023 Deal Value H2 2024 H1 2025 Deal Count VC investments have continued to shift from earlier stages towards later-stage VC investments.176 3,169 2,993 3,064 3,017 3,223 3,161 2,509 2,762 2,690 2,287 2,406 $134B $118B 2,414 2,487 2,303 2,602 2,224 2,227 $93B 2,297 $128B $88B $50B $39B H1 H2 2021 $44B H1 $47B $60B $26B $23B H2 H1 2022 Early-Stage (Series A and B) Deal Value Early-Stage (Series A and B) Deal Count $55B $47B $18B H2 2023 $30B H1 2024 $26B $26B H2 H1 2025 Later-Stage (Series C and Up) Deal Value Later-Stage (Series C and Up) Deal Count STA FF R EPORT: FI SCA L YEA R 2025 | 33 As deals became more concentrated, deal sizes continued to increase across funding stages.177 Median Deal Size178 In the first seven months of 2025, roughly 40% $100M $104M $100M $91M Series D of all VC dollars went to 10 companies. 179 $54M Series C $53M The share of deals below $5 million fell to a Series B decade low of $29M $61M $50M $44M $27M $30M $27M $30M $22M 49% Series A in the first half of 2025, from 55% in 2024 and 72% in 2015.180 $10M $12M $10M $12M $14M 2021 2022 2023 2024 2025* *As of June 30, 2025 While deals over $100 million, or mega-deals, remained a fraction of deal count, they represented a growing percentage of overall value.181 Over the last 10 years, mega-deals accounted for a larger share of overall value.182 44% 30% 57% 46% 43% 34 | 2016 45% 45% 31% In 2024, over 50% of overall deal value was raised by mega-deals.183 29% 2015 2017 57% 2018 2019 2020 2021 2022 2023 SE C O FFIC E O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON 2024 Down rounds reached record high levels.184 18% of deals, in the first half of 2025, were down rounds (compared to 15% for 2024 and 8% for 2021).186 Factors that may influence down round activity:185 5 Over-pricing in a previous environment 25% 5 Operational challenges of all Series D+ deals were down rounds.187 5 Strategic pivot 5 Change in market risk tolerance e n hav ds ca ch as n u o r Down effects, su and ive ees 188 negat or employ f stors. n dilutio urrent inve c some The median time between financing rounds continued to increase.189 2.1 yrs Series D+ 1.5 yrs 2.0 yrs Series C 1.5 yrs 9.7 years. 190 Series A + B 1.2 yrs 1.4 yrs Seed 1.3 yrs 1.5 yrs 2020 In 2024, the median age of a company raising Series D+ reached 2021 2022 2023 2024 STA FF R EPORT: FI SCA L YEA R 2025 | 35 During the first quarter of 2025, VC investments into existing portfolio companies increased, while new investments fell.191 Reinvestments, such as follow-on and extension rounds, increased from 44% in Q4 2024 to 52% in Q1 2025. 52% New investments decreased from 56% in Q4 2024 to 48% in Q1 2025. 48% Many VC investors take active roles in their portfolio companies, offering advice and support.192 Strategic Guidance 87% Marketing Intros 69% Operational Guidance 65% Board Management Guidance 58% Personnel Guidance 46% Other 20% 36 | “ Beyond funding, venture capital can also provide expertise, industry connections, monitoring, and strategic guidance helping small businesses build their reputation and scale. AMANDA WEINSTEIN AND ADAM DEWBURY, CENTER ON RURAL INNOVATION193 SE C O FFIC E O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON How is VC fundraising activity changing? Fund managers faced a challenging environment, raising less capital and fewer funds.194 1,629 1,737 Capital Raised Fund Count 22% 1,195 of fund managers found fundraising in the first half of 2025 more challenging than the first half of 2024.195 700 238 $173B $198B $98B $81B 2021 2022 2023 2024 $27B 2025* *As of June 30, 2025 In 2024, capital continued to be consolidated among a few VC firms.196 30 VC firms raised 75% of the total VC dollars raised in 2024.197 The time required to close new funds has increased.198 The average time spent fundraising increased from 15.9 months in 2024 to 17.4 months during the first half of 2025—the longest average in over a decade.199 STA FF R EPORT: FI SCA L YEA R 2025 | 37 In 2024, for the first time in a decade, emerging managers closed fewer funds than experienced managers.200 952 949 785 680 525 501 423 538 440 $109B 363 276 265 $49B $41B 193 648 577 162 192 $27B $31B $25B $16B $19B $24B $22B $28B $30B 2015 2016 2017 2018 2019 2020 $146B $64B 547 $71B $63B $52B 2021 2022 $27B 2023 365 335 $64B $17B 2024 131 107 $20B $6B 2025* *As of June 30, 2025 Experienced Firm Capital Raised Experienced Firm Count Emerging Firm Capital Raised Emerging Firm Count New and emerging fund managers tend to focus on pre-seed and seed stages.201 Within early-stage funds, new and emerging managers accounted for 60% 37% of seed funds202 and of pre-seed funds.203 In a challenging fundraising environment, a strong track record is crucial to attract limited partners, or LPs.204 At least one GP with a strong record 98% Spinout of a strong GP team 72% Previous relationship 59% Differentiated investment strategy 56% Fund has a significant investor “ Smaller, younger venture firms have felt the squeeze most acutely, as LPs chose to allocate to those with a longer record and with whom they have pre-existing relationships, rather than take a risk on new managers or those who have never returned capital to their backers. GEORGE HAMMOND, FINANCIAL TIMES205 30% 38 | S E C O FFICE O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON What is happening with VC investors or LPs? Nontraditional investors were most active in later-stage, larger deals.206 Nontraditional investors include firms and institutions not labeled as VC funds.207 In 2024, nontraditional investors participated in Of the 32% of VC deals which accounted for $168 billion invested by nontraditional investors: 78% of VC deal value 72% went to later-stage deals which accounted for 42% of the deals.208 (down from 33% of deals and up from 74% of deal value in 2023). A larger share of investors reported that they planned to invest more capital into VC funds in 2025.209 Down from 33% in 2024. Invest more 33% Invest same amount 55% Invest less 12% Up from 20% in 2024. The majority of LPs reported that they plan to keep steady or increase the number of relationships with managers.210 71% Decrease 17% Increase 41% No Change 42% of LPs are interested in early-stage new managers (up from 57% in 2023).211 52% of LPs are interested in late-stage new managers (down from 55% in 2023).212 STA FF R EPORT: FI SCA L YEA R 2025 | 39 How is exit activity changing? Companies are remaining private longer.213 From 2014 to 2024, the number of companies remaining private eight years or more after receiving their first VC round had quadrupled.214 6,364 2,849 $1,769B 1,446 $163B $494B 2014 2019 45% of unicorns received their first VC funding round 9 or more years ago.215 2024* *As of August 6, 2024 Aggregate Value Number of Companies The private secondary market has gained traction.216 $61 billion The U.S. secondary market was about in the 12-month period ending on June 30, 2025, accounting for about 32% of VC exit value.217 Secondary 32% Other exit values 68% of 25% s Over r vesto VC in icipated part have dary secon st in the the la t over 218 e k r a m . years three “ Secondaries have become increasingly dominant in the venture narrative due to their potential to simultaneously provide liquidity to long-time investors while startups remain private for longer. EMILY ZHENG, PITCHBOOK219 40 | SEC O FFICE O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON In 2025, exit volume and value surpassed both the first and second half of 2024 and acquisitions remained the dominant exit route.220 2,047 In the first half of 2025, acquisitions accounted for 73% of exit volume and 47% of total exit value.221 1,464 $716B 1,228 1,170 649 $51B $44B $28B $150B 2021 $78B $30B $24B $63B 2022 2023 $43B $27B $44B $20B $56B $81B 2024 2025* *As of June 30, 2025 Acquisitions Buyouts Public Listings Deal Count LPs continued to receive low distributions, contributing to a liquidity crunch.222 Distribution rate as a percentage of net asset value223 34% 31% 20% Average distribution rate from 2004 to 2024 Jun. Dec. 2021 18% Jun. 9% 8% 8% Dec. Jun. Dec. 2022 2023 11% 9% Jun. Dec. 2024 VC investors increasingly sought opportunities for liquidity.224 From 1990 to Q3 2025, on average, 8% of shares sold in VC-backed IPOs were sold by selling shareholders (such as VC investors and employees).225 In 2025 (through Q3), on average, 14% of shares sold in VC-backed IPOs were sold by selling shareholders.226 In 2025, 85% to 92% of private fund investors opted to sell rather than roll-over into a continuation fund (up from 75% to 80% in 2024).227 STA FF R EPORT: FI SCA L YEA R 2025 | 41 Founder and Investor Demographic Data228 Women founders’ share of VC capital and deals remained small.229 Since 2021, deals with one or more woman founder accounted for 24% of all VC deals and 19% of all VC capital. 230 Deals with women-only founders Deals with women and men founders Deals with men-only founders 9,175 8,502 7,285 7,468 $279B $6.3B $3.8B 678 651 2021 2022 Deal Value $2.2B $3.6B $1.1B 609 578 2023 2024 2,390 2,146 1,796 3,755 $169B 1,773 $121B 786 243 $56B 2025* 2021 $37B $25B $34B $34B 2022 2023 2024 2025* 2021 2022 2023 $161B $118B 2024 2025* *As of June 30, 2025 Deal Count Compared to all U.S. VC-backed companies, women-founded companies exited faster and maximized investor dollars.231 Median years to exit232 7.8 7.8 8.0 7.3 6.9 7.0 All VC-backed companies 7.5 7.6 7.4 6.8 Women-founded companies 2020 42 | 2021 2022 2023 2024 The median rate that women-founded companies spent cash was 16% less than the median rate of all U.S. VC-backed companies.233 SE C O FFIC E O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON Women made up 20% of VC investment partners and originated 28% of deals.234 Women accounted for: 39% 20% 28% of VC junior-level investment professionals of VC investment partners of the VC professionals who originated deals.235 The number of women-led investment firms grew.236 The number of women-led private investment firms increased 42% from 167 in 2023 to 237 in 2024. Many VC firms with majority women decision-makers tended to be smaller by dollar-size.237 18% of U.S. VC firms have majority women decision-makers. Of these firms had $50 million or less in assets under management (AUM). 61% 39% had more than $50 million in AUM. STA FF R EPORT: FI SCA L YEA R 2025 | 43 In 2024, the rate at which entrepreneurs founded startups and received VC funding varied considerably across demographic groups.238 Entrepreneurs founded startups at the following percentages in 2024:239 2% 3% 5% 37% 55% of founders were Middle Eastern of founders were African American/Black of founders were Hispanic/ Latino of founders were Asian American of founders were White Founders received the following percentages of VC funding in 2024:240 2% 0.6% 1% 44% 52% raised by Middle Eastern founders raised by African American/ Black founders raised by Hispanic/ Latino founders raised by Asian American founders raised by White founders The race and ethnicity of VC investment professionals varied depending on their level of responsibility.241 All VC investment professionals 6% VC junior-level investment professionals 7% VC investment partners 6% 6% VC investment professionals who originated deals 6% 7% 6% 8% Hispanic/Latino 44 | 24% 63% 28% 19% 22% African American/Black 58% 70% 70% Asian American/Pacific Islander SE C O FFIC E O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON White Geographic Data242 Where are VC funds raising capital? 243 The shading of each state illustrates the estimated capital VC funds raised in each state. The top 10 states for VC fundraising include California, New York, Massachusetts, Texas, Maryland, Florida, Illinois, Virginia, Indiana, and North Carolina. WA $257M MT $2M OR $125M ID $102M NV $85M CA $43B ND $0 WY $38M UT $50M AZ $144M MN $0 SD $0 WI $0 IA $22M NE $0 CO $450M VT $3M MO $81M KS $0 OK $0 NM $0 AR $0 TX $5B AK $0 GU No data No data available LA $0 MI $30M PA $325M OH IN IL $22M $1B $472M WV VA $0 $743M KY $33M NC TN $333M $0 SC $20M GA AL MS $0 $21M $265M NH $152M MA RI $6B $0 CT NJ $0 $100M DE DC $0 $281M MD $1B FL $1B HI $17M None NY $15B ME $0 PR No data Less than $100 million $100 million – $1 billion VI No data $1 – $10 billion $10 – $20 billion $Greater than $20 billion Where are VC funds investing?244 The shading of each state illustrates the number of deals—or investments in portfolio companies—VCs closed in each state. The top 10 states for deals closed are California, New York, Massachusetts, Texas, Florida, Delaware, Washington, Colorado, Illinois, and Pennsylvania. WA 439 OR 141 ID 34 NV 84 CA 4,563 MT 22 ND 11 UT 158 OK 30 TX 784 GU No data AK 4 No data available IL 358 AR 13 LA 33 IN 166 OH 195 KY 78 PA 293 WV VA 2 200 NC 259 TN 142 MS 11 AL 39 GA 201 ME 23 NH 28 MA RI 883 30 CT NJ 117 209 DE DC 561 75 MD 152 SC 67 FL 586 HI 8 Less than 50 deals NY 1,939 MI 189 MO 81 KS 36 NM 28 WI 84 IA 37 NE 53 CO 384 AZ 139 MN 153 SD 4 WY 34 VT 33 PR 13 50 deal – 100 deals 100 deals – 500 deals VI 2 500 deals – 1,000 deals Greater than 1,000 deals STA FF R EPORT: FI SCA L YEA R 2025 | 45 Where are different types of private funds raising capital under Regulation D?245 Top states where funds are located by aggregate capital raised through Regulation D offerings 3(c)(1) funds New York California Virginia Florida Illinois Texas Pennsylvania Delaware Washington Colorado 3(c)(7) funds New York California Florida Massachusetts Texas Illinois Connecticut District of Columbia Delaware Ohio VC funding is crucial for many scalable, high-growth startups; but rural startups struggle to access VC investors.246 Startups in other metro areas received 43% of VC funding. Startups in the top 5 metro areas received 56% of VC funding. VC remains highly concentrated in urban hubs Startups in rural areas received only 1% of VC funding. Access to VC funding in rural areas is limited but rising.247 Private investment per capita, 5-year average tments in VC inves as have rural are % $73 d by 53 , increase ears st four y Rural $112 $729 in the la 10% d to just compare etro areas. in m growth Nonrural $802 2014 – 2018 46 | 2019 – 2023 SE C O FFICE O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON Initial Public Offerings and Small Public Companies C ompanies can access broad pools of investors when they conduct public offerings. This allows them potentially to raise large amounts of capital to fund activities such as research and development, capital expenditures, or debt service. Public offerings also provide liquidity to earlier-stage investors and employees. What is happening with IPO activity? While initial public offerings, or IPOs, remained historically low over the last three years, the number and offering proceeds have trended upward.248 180 144 SC 87 82 RE $20B D A $13B $11B MORE FOR IN $28B $19B $16B N C? 72 A FO 102 Y LI 130 TO G O P U B $5B H1 H2 2022 H1 H2 H1 2023 Total IPO Proceeds H2 2024 H1 2025 Number of IPOs What were the top industries raising capital in IPOs (excluding pooled funds but including Special Purpose Acquisition Companies, or SPACs)?249 Banking and Financial Services $2.7B SPACs $18.2B Technology $7.1B Real Estate $5.6B Manufacturing $3.7B Health Care $3.6B Energy $2.8B STA FF R EPORT: FI SCA L YEA R 2025 | 47 In 2024, IPOs by small companies represented 44% of all IPOs but only 3% of capital raised.250 IPOs by Small Companies IPOs by Large Companies SPAC Offerings 107 89 86 81 72 69 66 58 $29B 47 42 49 $19B $15B $2B $1B $1B 2022 2023 2024 $12B 31 $9B $8B $12B $3B $0.7B 2025* 2022 2023 2024 Deal Value of IPOs 2025* 2022 2023 2024 2025* *As of June 30, 2025 Number of IPOs In 2024, the number of exchange-listed IPOs remained low, and the median age of an IPO issuer increased.251 Number of Exchange-Listed IPOs 15 12 13 11 380 80 66 63 173 159 157 159 2000 2002 2004 15 11 9 8 6 14 13 2006 21 2008 Median Age 41 91 2010 11 81 12 12 11 10 10 12 14 10 10 9 11 8 10 93 158 206 118 75 106 134 113 165 311 38 54 72 2012 2014 2016 2018 2020 2022 While the percentage of IPO companies with VC backing has varied, the link between VC-backing and IPO readiness remains.252 2015 65% 2000 64% 2010 44% 2005 28% 48 | 2020 68% ked 0, VC-bac Since 200 counted for s ac companie s and 66% of IPO 253 51% of all Os. IP y g lo o techn S E C O FFICE O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON 2024 51% 2024 How are the dynamics changing for companies going public? Improved access to capital is an important motive for companies going public.254 Companies that go public are more likely to have: Higher capital expenditures and assets 256 Higher sales 255 Post IPO, on average, companies’: 258 Credit spreads260 dropped by almost 25%, showing increased investor confidence. Less profitability257 4 years after an IPO, on average, companies’:259 Capital expenditures were 40% larger than non-IPO companies. Borrowing costs declined. Total assets were 50% larger than non-IPO companies. Pool of lenders expanded. Bank debt increased by 40%. Average of 4.5 banks post IPO compared to 3.5 banks pre IPO. STA FF R EPORT: FI SCA L YEA R 2025 | 49 What share of IPOs were led by founder-CEOs? Founder-led IPOs were more common in high-growth sectors and less frequent in more traditional sectors.261 Prevalence of founder-led companies at IPO by industry262 44% Services Software 44% 41% Life sciences 75% of the co mpanies that went public in 2017–202 1 with founder C EOs remained founderled in 2025. 19% Retail Industrials 17% How has the U.S. public market changed over time? The number of exchange-listed companies continues to decrease from the peak of the late 90s and early 2000s.263 6,258 2,300 Total Exchange-Listed Companies 3,874 2,307 3,518 2,519 Large Exchange-Listed Companies 3,958 Small Exchange-Listed Companies 2000 3,546 1,567 2010 1,027 2020 2,332 1,186 2025* *As of June 30, 2025 50 | S E C O FFIC E O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON While the number of exchange-listed firms decreased, the average market capitalization of an exchange-listed firm increased 5.5X between 1996 and 2023.264 Many factors have contributed to the increased size and decreased number of U.S. exchange-listed companies, such as: 5 Increase in mergers 5 Delisting of many smaller companies 5 Between 1996 and 2020, approximately 4,000 mergers between public firms occurred. Low number of IPOs How did the market fare based on other metrics? The aggregate market capitalization of listed companies increased by 197% from 1996 to 2023 (from $14 trillion to $49 trillion).265 Public company profits increased 4X from 1996 to 2022 (from $366 billion to $1.6 trillion).266 Public company profits were more than 6% of U.S. GDP (compared to 4.5% in 1996).267 STA FF R EPORT: FI SCA L YEA R 2025 | 51 Small Public Companies While small public companies represented almost half of all public companies, they were less likely to be exchange-listed than large public companies.268 Large Public Companies 2,992 (up 2% from 2024) N S B MORE FOR IN LI C C O M PA N of these small public companies were not listed on an exchange, compared to 2% of large public companies. Which top industries had more small public companies?269 651 Health Care Technology 347 Manufacturing 318 Banking and Financial Services 469 225 Business Services 151 SPAC 133 428 471 453 179 58 Small Public Companies 52 | I E SC PU 32% A FO Small Public Companies 2,372 (down 10% from 2024) Large Public Companies SE C O FFIC E O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON How much capital did U.S. small public companies raise through registered equity offerings?270 Average proceeds $29M Average proceeds $13M Average proceeds $13M 224 219 Average proceeds $21M 250 238 254 165 $4.7B $5.4B $3.6B 100 $2.9B $2.9B $2.9B $2.7B H1 H2 H1 H2 H1 2022 2023 Total Proceeds Did you know?271 50% 21% of all registered equity offerings during the 12-month period ended June 30, 2025, were issued by small public companies and of small public companies raised capital through a registered equity offering during the 12-month period ended June 30, 2025. H2 2024 H1 2025 Number of Offerings blic s of small pu Top industrie in a l ising capita companies ra 272 uity offering: registered eq 4.9B) 9 SPAC ($ are ($1.5B) 9 Health C B) Services ($1.1 9 Business gy ($338M) 9 Technolo l and Financia 9 Banking 7M) Services ($28 STA FF R EPORT: FI SCA L YEA R 2025 | 53 Costs of Being Public Public companies are divided into different filer and reporting status designations. Those designations determine which companies are eligible to rely on scaled disclosure requirements and extended reporting timelines. For example, non-accelerated filers have delayed reporting timelines and are exempt from the requirement to provide an auditor’s attestation of internal controls under Section 404(b) of the Sarbanes-Oxley Act, or SOX. MORE FOR IN S R & TA TU FILE While larger companies incur higher overall compliance costs, small public companies A N FO Companies incur compliance costs related to both internal expenses, such as personnel, technology, and travel, and external expenses, such as audit fees.273 SC How does SOX compliance affect small public companies? experience a proportionally higher cost burden.274 RE PORTING S How does shifting from non-accelerated to accelerated filer status affect the audit fees that a small public company pays? As public companies transitioned from non-accelerated filer status to accelerated filer status in 2020-2022, they experienced transition costs, including increased audit fees related to SOX 404(b).275 YEAR BEFORE TRANSITION YEAR OF TRANSITION YEAR AFTER TRANSITION Audit fees increased in preparation of transition Audit fees saw largest increase Audit fees began to level off Median increase of $80,000 Median increase of $219,000 Median increase of $47,000 NON-ACCELERATED FILER STATUS 54 | ACCELERATED FILER STATUS S E C O FFICE O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON OTC companies that provided public disclosure saw a positive impact on liquidity for investors.276 Securities that are not listed on an exchange may be traded “over-the-counter.” These securities are sometimes called OTC securities. Each venue may have its own eligibility requirements for displaying and accessing quotes on its system, including whether information about the company is available. Companies that began to provide public disclosures tended to have increased liquidity for their investors: 9 Estimated increases of 20% in the 1-day and 27% in the 6-day market adjusted returns following the company’s first disclosure. 9 Average increase in traded securities and narrower bid-ask spreads. 9 Average increase in the median number of market makers per company from 6 to 7. What are the top investor relations challenges for small public companies? 277 Finding and engaging new investors Reducing stock volatility Sharing the company story effectively Finding or building strong analyst relationships Many small public companies received little to no analyst coverage.278 Without analyst coverage, small public companies may have difficulty attracting institutional investors. Average number of analysts per company Percentage of companies with no coverage S&P 500 Index Russell Microcap Index 20 S&P 500 Index 0.4% Russell Microcap Index arket dian m e m e any Th comp a f o ussell cap the R in d e includ dex is cap In 279 Micro illion. $261 m 17.3% 3 STA FF R EPORT: FI SCA L YEA R 2025 | 55 Geographic Data280 Where did companies raise capital through registered offerings—often called public offerings? The shading of each state shows the estimated total capital raised in the 12 months ended June 30, 2025, and the number indicates the total number of offerings in that state.281 WA 31 MT 1 Registered Offerings OR 9 ID 11 NV 34 WY 1 MN 44 SD 1 CO 39 CA 489 AZ 21 OK 23 TX 235 AK 0 GU 0 NONE IL 70 IN 47 OH 43 KY 7 PA 83 WV 1 MS 5 AL 6 VA 86 GA 56 RI 6 CT NJ 49 92 DE DC 12 6 SC 6 FL 119 HI 1 PR 2 LESS THAN $1 BILLION $1 – $5 BILLION $5 – $20 BILLION now? K u o Y d i D er of by numb states The top 10 were: offerings registered husetts • Massac ia rn rsey • Califo • New Je rk o Y w e N ia • • Virgin lvania • Texas • Pennsy n a ig h • Mic • Illinois • Florida 56 | MD 28 NH 2 MA 104 NC 47 TN 30 AR 7 LA 6 NY 369 MI 161 MO 11 KS 5 NM 1 WI 10 IA 10 NE 15 UT 16 ME 1 VT 1 ND 0 S E C O FFIC E O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON VI 0 OVER $20 BILLION How did rural small public companies raise capital through registered equity offerings?282 In the three years ended June 30, 2025, rural small businesses raised $218 million through 20 registered equity offerings. Registered equity offerings accounted for Rural businesses accounted for 4% 2% of the total capital raised by rural small businesses. of the total capital raised by all small businesses in registered equity offerings. How did small public companies in areas affected by natural disasters raise capital through registered equity offerings?283 In the three years ended June 30, 2025, small businesses in areas affected by natural disasters raised $5 billion through 560 registered equity offerings. Registered equity offerings accounted for 2% of the total capital raised by small businesses in areas affected by natural disasters. Businesses affected by natural disasters accounted for 41% of the total capital raised by all small businesses in registered equity offerings. STA FF R EPORT: FI SCA L YEA R 2025 | 57 THE OFFICE What We Do 58 | SE C O FFICE O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON Outreach and Engagement O ur outreach extends from coast to coast, across media platforms, and to a breadth of partners and organizations. What we learn through our engagement with small businesses, their investors, and those who support them in the small business marketplace informs our advocacy efforts throughout the year. Our Approach Our work relies on our ability to stay attuned to the needs of small businesses and their investors, to understand their most pressing capital-raising issues, and to help develop potential policy solutions. A significant portion of our efforts includes responding to the needs of small businesses and their investors with information and resources that are meaningful and accessible across all stages of the capital-raising lifecycle. We incorporate feedback and assess our outreach programming and educational resources on an ongoing basis to ensure our efforts stay relevant and accessible in an evolving landscape. Listen We engage with small business communities across the country to learn about capital-raising challenges and successes. Reassess Develop We measure the efficacy of our work through qualitative and quantitative analysis, make improvements, and assess new opportunities to support small businesses and their investors. We develop educational resources and additional outreach programing to foster fruitful discussions and to help identify and address concerns. STA FF R EPORT: FI SCA L YEA R 2025 | 59 Outreach Events Throughout the year, we met with small businesses, their investors, entrepreneurial support organizations, and other leaders in the marketplace to hear their perspectives on issues facing the small business ecosystem, to engage in collaborative discussions about policy solutions to address their concerns, to increase awareness of the role of our office in amplifying the voices of small businesses and their investors, and to share the SEC’s educational resources. Some of the events in which we participated this year include: Joined a panel at the Society for Financial Education & Professional Development’s Annual Financial Literacy Leadership Conference on the complexities of business financing. Presented resources and engaged in a breakout session on capital-raising challenges and policy at the International Business Innovation Association eBuilders Forum in Kansas City. Partnered with a veteran founder at the 2024 Service Academies Global Entrepreneur Summit on the role of ESOs in helping founders grow and scale their businesses. Joined policymakers and academics at the National Bureau of Economic Research Place-Based Policies and Entrepreneurship Research Conference. Engaged with Bank of America Breakthrough Lab alumni and current cohort on securing capital to grow small businesses. Discussed capital-raising challenges and policy suggestions at the HINSHAW on Capital Formation event. Conducted a webinar for the National Association of Legal Assistants to share SEC resources to support their work on capital-raising offerings. October 2024 60 | SE C O FFIC E O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON Joined a fireside chat and engaged in a roundtable at the Angel Capital Association—The Summit of Angel Investing in Denver. Led a workshop at the 21st Annual Transactional Clinical Conference “Driving Change” in Detroit. Hosted policy roundtables on Reassessing the Framework for Small Public Companies and Reexamining the IPO On-Ramp. Joined a live broadcast of Voices of Montana, followed by remarks at the Investing in Montana Summit 2025. Presented an online workshop for North Dakota entrepreneurs and investors hosted by the Jamestown Regional Entrepreneur Center. Joined a panel on Removing Barriers to Capital Formation hosted by the Cato Institute. Engaged with local entrepreneurs, investors, and ESOs in a series of events at the University of California San Diego and San Diego State University. Engaged with VCs and entrepreneurs and led a session on capital raising at the Women's Venture Summit hosted by the Stella Foundation. Presented a webinar as part of the U.S. Small Business Administration Federal Resources Every Small Business Should Know program hosted by its Houston office. September 2025 STA FF R EPORT: FI SCA L YEA R 2025 | 61 2.5K+ 5560+EVENTS PARTNER ATTENDEES with ORGANIZATIONS HOURS 50+ CONTENT of We shared EDUCATIONAL TOOLS and RESOURCES to empower small businesses, their investors, and the organizations that support them We EXPANDED our educational resources to ADDRESS QUESTIONS raised during our outreach events In October 2024, we shared our resources at the InBIA Ecosystem Builders Forum in Philadelphia, where we also were able to GATHER FEEDBACK from entrepreneurial support organizations that play a key role in supporting small businesses. Our Director shared information in June about our SMALL BUSINESS RESOURCES at the 2025 Investing in Montana Summit as well as on the Voices of Montana radio show. The Office ENGAGED with ENTREPRENEURS and INVESTORS throughout the year to showcase our resources, including at professional and co-working spaces like this May 2025 event at The Gathering Spot in Washington, D.C. 62 | S E C O FFIC E O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON SMALL BUSINESSES and their INVESTORS about TRENDS and CHALLENGES in early-stage capital raising SMALLER FUNDS on how they navigate RAISING and DEPLOYING CAPITAL We HEARD from We ENGAGED with entrepreneurs OUTSIDE OF TRADITIONAL HUBS about their unique experiences suggestions to improve EXEMPT OFFERINGS, including REGULATION D and REGULATION CROWDFUNDING SMALL BUSINESSES around the country We gathered FEEDBACK to inform POLICY potential IMPROVEMENTS to the IPO PROCESS and the ABILITY OF SMALL COMPANIES to REMAIN PUBLIC areas where ADDITIONAL DATA or RESEARCH is needed We engage d with sma ll businesses and investo rs throughou t the year to gather feed back, inclu ding at roundtable s focused o n issues ranging fro m early-sta ge to small cap re porting co mpanies. STA FF R EPORT: FI SCA L YEA R 2025 | 63 44th Annual Small Business Forum T he SEC’s annual Small Business Forum is a unique event where members of the public and private sectors gather to provide feedback to improve capital-raising policy.284 The Forum covers a broad range of issues affecting small businesses, from early-stage entrepreneurial ventures to smaller public companies, and their investors. This year marked the 44th Forum, which the Office hosted at SEC Headquarters in Washington D.C. and webcast on sec.gov. The Forum featured remarks from the then-Acting Chairman and each of the Commissioners as well as thoughtful discussions with members of the public and private sectors about improving policy affecting how entrepreneurs, small businesses, and smaller public companies raise capital from investors. Participants at the Forum brought a breadth of perspectives to the policy deliberations, approaching capital raising from a variety of backgrounds, geographies, and lifecycle stages.285 64 | SE C O FFICE O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON Each speaker session focused on a different stage of the capital-raising lifecycle, including: tage Advan mefield o H g : Findin bs n-One l Hu One-o ditiona ra T e Outsid Trends ies and Strateg g : s k c the Blo apital Raisin Out of eC y-Stag rl a E in ea from Id tance the Dis g in o :G n-One One-o tion cu e x E to for e Plans s s: Gam maller Fund s e c c u S S Up for ies and n g a in p m m a Te Co -Stage Growth Serial from a hlights g Innovation ig H : e ionin n-On One-o neur Champ re Entrep and tering ok: En Arena Playbo blic Market p a C Pu e Small th cing in Advan As reflected in this year’s theme of teamwork and collaboration, the Forum provided an opportunity for public and private sector market participants to highlight successes and challenges and to “huddle up” to strategize ways to improve capital-raising policy, including suggesting and prioritizing capital-raising policy recommendations to be delivered to the Commission and to Congress. Participants voted to indicate their highest priority recommendations for early-stage capital raising, growth-stage companies, and small public companies. Video archives of each day’s events are available online. On September 23, 2025, the Commission delivered the 2025 Small Business Forum Report to Congress. The report summarized the 44th annual Forum proceedings, including the recommendations developed by participants for changes to improve the capital-raising framework and the Commission’s responses to those recommendations. STA FF R EPORT: FI SCA L YEA R 2025 | 65 Educational Tools and Resources O ver the years, we have consistently heard from many in the small business ecosystem that the regulatory framework is complex and that identifying and navigating appropriate pathways to raise capital can be daunting for small businesses and their investors. 2M+ VIEWS of our RESOURCES since launching in 2022. As part of our efforts to make raising capital more accessible to small businesses and their investors, we have continued to develop and expand the educational tools, resources, and programming available through our Resources for Small Businesses. Incorporating Feedback: Expanding our Educational Materials We continue to expand and update our educational resources to address questions and feedback collected through our outreach efforts. This year, we introduced nine new topics in our Building Blocks suite of one-pager style overviews of common capital-raising questions and updated several others. We launched our SmallBiz Essentials blog series focusing on capital-raising concepts that could help inform entrepreneurs on their capital-raising journey as well as our SmallBiz Updates newsletters to keep users informed of developments in the Office, the SEC, and the small business landscape generally. 66 | S E C O FFICE O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON We also continued our Let’s Talk Small Business video series, where we interview individuals from across the small business ecosystem on their role in supporting entrepreneurs and their investors, including a special Let’s Talk Networking mini-series focusing on the importance of networking and mentorship for entrepreneurs. 12K+ VIEWS of our EVENT RECORDINGS and VIDEOS Reaching our Audience: Visits to our Resources We continue to increase our reach to the public via these Resources for Small Businesses, through social media, including LinkedIn, X, Instagram, and Facebook, as well as emails to our subscribers. Visits to the portal and views of our educational resources continued to grow. 450K+ VISITORS across all resources, of which were 54% NEW USERS 25K+ SUBSCRIBERS to our #SECSmallBiz EMAILS STA FF R EPORT: FI SCA L YEA R 2025 | 67 Supporting Small Businesses from Startup to Small Cap: A Full Suite of Resources Our materials seek to address all aspects of the capital-raising lifecycle and include: Funding Roadmap Our roadmap guides users through the different options for funding a small business, from personal savings to grants and loans to capital-raising from investors, providing context for when securities laws apply to small business financing activities. Navigate Your Options We continue to improve our interactive tool that explores regulatory pathways to raise capital, identifying the most relevant options based on the user's answers to a short series of simple questions about their business, and expanding the resources available through the tool. Capital-Raising Building Blocks Our suite of educational materials breaks down fundamental securities law concepts into plain language, including new resources focused on public reporting companies, Regulation A, non-profit organizations, and how to comment on SEC rulemaking, as well as updates and additions to previous resources. Exempt Offerings Users can find more detailed resources on common capital-raising pathways—like how to raise capital from investors by offering and selling securities under an exemption from the registration requirements. 68 | S E C O FFIC E O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON Going Public In this section, we offer resources on how to prepare for and conduct a registered public offering as well as the reporting and other requirements for public companies. Glossary We continue to expand our curated glossary of key terminology that makes the language of capital raising more accessible to small businesses and their investors. This year, we added new terms to the gallery and links to additional resources— like the latest Staff Compliance and Disclosure Interpretations—for users looking to learn more. Capital Trends Maps We regularly update the data available through our interactive maps to allow users to stay informed about how and where capital is being raised across the country. Small Business Compliance Guides Users can find the SEC's small business compliance guides, which provide valuable information on SEC rules on offering and selling securities and financial and other reporting by public companies. STA FF R EPORT: FI SCA L YEA R 2025 | 69 Small Business Videos We offer educational videos on common capitalraising topics as well as videos summarizing the potential impact of Commission policy or rulemaking initiatives on small businesses and their investors. This year, we continued to expand our Let’s Talk Small Business video series, where we engage with small business experts and innovators on their role and perspectives on capital raising. We also introduced our Let's Talk Networking mini-series, compiling insights and commentary from thought leaders on building a network of mentors, advisors, and potential investors. Additional Government Resources for Small Business In this section, users can find additional resources from the Commission and our colleagues at other government agencies to supplement our suite of small business capital-raising resources. Small Business Events and Recordings Users can find information on—and in many cases recordings of—webinars, panel discussions, and other events focusing on issues facings small businesses and their investors. 70 | S E C O FFIC E O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON SmallBiz Essentials We launched a blog series covering a number of basic securities law and other capital-raising concepts. The blog posts are available on the Office's homepage and we invite entrepreneurial support organizations and others in the small business ecosystem to share them as guest blog posts with their networks. SmallBiz Updates We engage with over 25,000 email subscribers, alerting them to key developments in our office, the SEC, and throughout the small business ecosystem. This year, we launched our SmallBiz Updates newsletter series, where we also share many of those highlights via the Office's homepage to make them available to users who may not subscribe to our emails. STA FF R EPORT: FI SCA L YEA R 2025 | 71 COMMITTEE Highlights 72 | S E C O FFIC E O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON The Small Business Capital Formation Advisory Committee In addition to establishing the Office of the Advocate for Small Business Capital Formation, the Small Business Advocate Act also established the SEC’s Small Business Capital Formation Advisory Committee. The Committee is designed to provide a formal mechanism for the Commission to receive advice and recommendations on Commission rules, regulations, and policy matters affecting small businesses, from emerging, privately-held companies to publicly-traded companies with less than $250 million in public market capitalization; trading in securities of such companies; and public reporting and corporate governance of such companies. The Office provides administrative support for the Committee, which otherwise functions independently. STA FF R EPORT: FI SCA L YEA R 2025 | 73 Committee Members During the Fiscal Year MARCIA DAWOOD Chair* Venture Partner, Mindshift Capital Charlotte, NC ROSE STANDIFER Vice Chair* Partner, Foley Hoag LLP Denver, CO BART DILLASHAW Secretary* Partner, Michael Best & Friedrich LLP Lincoln, NE HERBERT DRAYTON III Assistant Secretary* Founder and Managing Partner, HI Mark Capital Charleston, SC WEMIMO ABBEY Co-Founder and Co-CEO, Esusu Los Angeles, CA DONNEL BAIRD Serial Tech Founder, Brooklyn, NY WILLIAM M. BEATTY** Securities Administrator, Washington State Securities Division Olympia, WA ROBERT BOLEN** National Ombudsman and Assist. Administrator for Regulatory Enforcement, U.S. Small Business Administration Washington, DC STACEY BOWERS Former Director, Office of the Advocate for Small Business Capital Formation, SEC Washington, DC GEORGE COOK Co-Founder and CEO, Honeycomb Credit Pittsburgh, PA * The following members served as Committee officers until May 2025: Erica Duignan Minnihan, Chair; Marcia Dawood, Vice Chair (from November 2024); Jasmin Sethi, Secretary; and Davyeon Ross, Assistant Secretary. In May 2025, the following members were elected to serve as Committee officers: Marcia Dawood, Chair; Rose Standifer, Vice Chair; Bart Dillashaw, Secretary; and Herbert Drayton, Assistant Secretary. 74 | S E C O FFICE O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON VINCENT CORDERO Venture Investor and Former C-Suite Executive Chicago, IL GREGORY J. DEAN** Senior VP of the Office of Government Affairs, FINRA Washington, DC DIEGO MARISCAL Founder, CEO, and Chief Disabled Officer, 2Gether-International Washington, DC ERICA DUIGNAN MINNIHAN Former Chair* Founder and General Partner, Reign Ventures New York, NY JENNIFER NEWTON Founder and Managing Attorney, StartSmart Counsel Miami, FL LAURA NIKLASON Founder, President, and CEO, Humacyte Durham, NC DAVYEON ROSS Former Assistant Secretary* Co-Founder and President, DDSport/ShotTracker Overland Park, KS JASMIN SETHI Former Secretary* Founder and CEO, Sethi Clarity Advisers Philadelphia, PA AREN SHARIFI Partner, Kutak Rock LLP Denver, CO MARC OORLOFF SHARMA* Asst. Director and Chief Counsel, Office of the Investor Advocate, SEC Washington, DC WENDY STEVENS Partner, Forvis Mazars, LLP New York, NY DENNIS R. SUGINO Founder, Kansa Advisory LLC Huntington Beach, CA ** Committee members include the SEC’s Advocate for Small Business Capital Formation and three non-voting members appointed by the SEC’s Investor Advocate, the North American Securities Administrators Association (NASAA) and the Small Business Administration (SBA), as well as an observer appointed by the Financial Industry Regulatory Authority (FINRA). During the fiscal year, Bailey DeVries and Heath Morris each also served STA FF R EPORT: FI SCA L YEA R 2025 | 75 as the SBA-appointed member. Summary of Committee Activities The Committee met four times during FY 2025. Materials from the meetings, including agendas, transcripts, webcasts, and presentations are available on the Committee’s webpage. Meeting Date Agenda Topics November 13, 2024 Section 3(c)(1) of the 40 Act; Supporting Emerging Fund Managers February 25, 2025 Facilitating Capital Formation for Emerging Fund Managers; Challenges Faced by Small Public Companies Not Listed on a National Securities Exchange May 6, 2025 Exploring Regulation A – Practical Considerations and Regulatory Challenges July 22, 2025 Continued Exploration of Regulation A; Deep Dive on “Finders” 76 | SE C O FFICE O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON Summary of Committee Recommendations During FY 2025, the Committee put forward two recommendations to the Commission. Recommendation Topic Adoption Date Qualifying Venture Capital Fund Exemption February 25, 2025 Regulation A July 22, 2025 SCAN FOR MORE INFO SMALL BUSINESS CAPITAL FORMATION ADVISORY COMMITTEE STA FF R EPORT: FI SCA L YEA R 2025 | 77 ENDNOTES All the Details 78 | S E C O FFICE O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON 1 2 3 4 5 6 7 8 9 10 See Small Business Advocate Act of 2016, as amended, available at https://www.sec.gov/files/ Small%20Business%20Advocate%20Act%20 of%202016-as%20amended.pdf. See NVCA, “2025 Yearbook,” (Mar. 27, 2025) at 14, available at https://nvca.org/document/nvca2025-yearbook/ for the mature and later-stage business industries. The small public company industries are based on DERA estimates. Small public companies include U.S. public companies with a size less than or equal to $250 million on the date of the offering, calculated by multiplying price of the company’s stock at the close of the day of the offering by the number of outstanding shares on the day of the offering. See infra notes 63 and 269 for a description of how these amounts were estimated. Id. at 47-48, (noting that VCs invest in high growth companies) and 10 (noting that VC backed companies are job creators). See U.S. Small Business Administration Office of Advocacy, “New Advocacy Report Shows the Number of Small Businesses in the U.S. Exceeds 36 million,” (June 30, 2025) available at https:// advocacy.sba.gov/2025/06/30/new-advocacyreport-shows-the-number-of-small-businesses-inthe-u-s-exceeds-36-million/. Id. The time period covered by the data was March 2023 to March 2024. See Myranda Mondry, “Entrepreneurship in 2025: Trends and predictions for the year ahead,” QuickBooks Blog, (Dec. 17, 2024) available at https://quickbooks.intuit.com/r/small-businessdata/entrepreneurship-in-2025/. See Babson College, “Global Entrepreneurship Monitor 2024-2025 United States Report,” (Feb. 17, 2025) at 12, available at https://www. gemconsortium.org/file/open?fileId=51640. See Myranda Mondry, supra note 6. Id. See Federal Reserve Banks, “2025 Report on Employer Firms: Findings from the 2024 Small Business Credit Survey,” (Mar. 27, 2025) at 4 and Excel tab “Employer firms,” question “financial challenges, prior 12 months,” available at https://www.fedsmallbusiness.org/reports/ survey/2025/2025-report-on-employer-firms. In addition, 75% increased costs of goods, services, and/or wages, 62% paying operating expenses, 51% uneven cash flow, 48% weak sales, 35% making payments on debt/interest rates, 28% credit availability, 0% other. In 2023, 93% of small businesses experienced financial challenges, with businesses having the same top three challenges; Federal Reserve Banks, “2024 Report on Employer Firms: Findings from the 2023 Small Business Credit Survey,” (Mar. 7, 2024) at Excel tab “Employer firms,” available at https://www. fedsmallbusiness.org/reports/survey/2024/2024report-on-employer-firms. 11 12 13 14 15 16 17 18 19 See Mercury, “Report: The new economies of starting up. How 1,500 early-stage companies are raising, spending, and hiring in 2025,” (Aug. 19, 2025) available at https://mercury.com/blog/ startup-economics-report-2025#wheres-themoney-coming-from. See Goldman Sachs, “Small Businesses Plan to Grow Despite Capital, Tax, and Trade Uncertainty,” (June 5, 2025) available at https://www.goldmansachs.com/communityimpact/10000-small-businesses-voices/insights/ small-businesses-plan-to-grow-despite-capital-taxand-trade-uncertainty. See Federal Reserve Banks, “2025 Report on Employer Firms: Findings from the 2024 Small Business Credit Survey,” supra note 10, at 9 and Excel tab “Employer firms,” question: “Total amount of financing sought in prior 12 months.” In addition, 23% sought $25,000 or less, 17% sought $25,001-$50,000, 20% $50,001$100,000, 18% sought $100,001-$250,000, 15% sought $250,000-$1 million, and 7% sought more than $1 million. See FDIC, “BankFind Suite: Customized Comparisons,” available at https://banks.data. fdic.gov/bankfind-suite/peergroup/customized/ search?commonSearchesExpand=true& comparisonType=&financials=ASSET&income Basis=YTD&locationsExpand=false&maximum Range=300000000&minimumRange=&page Number=1&peerGroups=&pgcStep=step1& primaryRegulator=FDIC®ulatoryExpand=false &reportPeriod=20160331&savedPGCSearch= false&searchPush=true&sortField=CERT&sort Order=ASC&unitType=%24 as of August 8, 2025. Data covers small banks (up to $300M in assets) for the first quarter of 2025 and 2016. See Mercury, supra note 11. See Quentin Brummet and Katie Johnson, “StartUp Capital for U.S. Business Ventures: Evidence from EPOP: 2024,” EPOP, (Dec. 19, 2024) at 2, available at https://epop.norc.org/content/dam/ epop/media/publications/pdf/epop-2024-briefstartup-capital.pdf. See Federal Reserve Banks, “2025 Report on Employer Firms: Findings from the 2024 Small Business Credit Survey,” supra note 10, at i and Excel tab “Employer firms,” question “Reason for seeking financing,” and Excel tab “Revenue,” question “Reason for seeking financing.” In addition, 0% sought financing for other reasons. Id. at Excel tab “Revenue,” question “Reason for seeking financing.” In addition, of those firms with $0-$25,000 revenue, 64% sought financing to meet operating expenses, 33% to have available credit for future use as needed, 22% to refinance or pay down debt, 20% to make repairs or replace capital assets, and 0% for other reasons. Id. at Excel tab “Employer firms,” question “Actions taken in response to financial challenges.” STA FF R EPORT: FI SCA L YEA R 2025 | 79 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 See Quentin Brummet and Katie Johnson, supra note 16, at 1, 5; Mercury, supra note 11. See Quentin Brummet and Katie Johnson, supra note 16, at 1, 5. This includes Governmentguaranteed loans and government loans. Government-guaranteed loans were used by 13% of entrepreneurs and government loans are used by 9% of entrepreneurs. Id. See Federal Reserve Banks, “2025 Report on Employer Firms: Findings from the 2024 Small Business Credit Survey,” supra note 10, at Excel tab “Employer firms,” question “Actions taken in response to financial challenges.” Id. Id. Id. See Quentin Brummet and Katie Johnson, supra note 16, at 7. See Nasdaq Entrepreneurial Center, “Harnessing AI & Data to Enhance Capital Readiness,” (Mar. 12, 2025) available at https://www.linkedin.com/ pulse/harnessing-ai-data-enhance-capital-readinessb2phc/. See Goldman Sachs, supra note 12. Source listed microloans or fintech tools as examples of potential technical assistance for accessing capital. See Small Business Majority, “Voice of Main Street: Entrepreneurs struggle to access funding, support policies that increase availability of responsible capital,” (Apr. 29, 2025) at 6, question 25, “What is the main reason you haven’t taken steps to secure funding,” available at https:// smallbusinessmajority.org/sites/default/files/ research-reports/2025-April-Voice-of-Main-StreetToplines.pdf. See Nasdaq Entrepreneurial Center, supra note 28; Rosie Bradbury, “Network effects: Well-connected VCs see lower failure rates, better returns,” PitchBook, (Mar. 19, 2025) available at https:// pitchbook.com/news/articles/network-effects-wellconnected-vcs-lower-failure-better-returns. The article distinguished “well-connected investors” and “peripheral investors” based on a proprietary algorithm measuring investor influence based on the investors’ connections in the ecosystem. See Nasdaq Entrepreneurial Center, supra note 28. See Rosie Bradbury, supra note 31. Id. See Ravish Mayya and Peng Huang, “Startup Accelerators, Information Asymmetry, and Corporate Venture Capital Investments,” Management Science, (Mar. 3, 2025) at 18, available at https://pubsonline.informs.org/ doi/10.1287/mnsc.2020.03494; see also Silicon Valley Bank, “State of the Markets. SVB’s Innovation Economy Outlook. H1 2025,” (Jan. 28, 2025) at 16, available at https://www.svb.com/ globalassets/library/uploadedfiles/reports/state-ofthe-markets-h1-2025.pdf. 80 | 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 See Ravish Mayya and Peng Huang, supra note 35, at 4. Id. at 3. See John Harbison, “Trends in Funding Rates— What’s Hot and What’s Not—Part 1,” Angel Capital Association, (Feb. 25, 2025), available at https://angelcapitalassociation.org/blog/trends-infunding-rates-whats-hot-and-whats-not-part-1/. Id. at 18. See Silicon Valley Bank, supra note 35, at 16. Id. See January Ventures, “2024 Early Stage Founder Sentiment Report,” (2024) at 5, available at https://cdn.prod.website-files.com/ 6671b0404ec478a8eb90879d/67ff6b6cce 95fa262a413728_JV_2024_FINAL_2.pdf. Id. See https://www.sec.gov/resources-smallbusinesses/capital-raising-building-blocks/earlystage-investors and https://www.sec.gov/resourcessmall-businesses/capital-raising-building-blocks/ accredited-investors. See U.S. Securities and Exchange Commission Office of the Investor Advocate, “Exploring Accredited Investors and Private Market Securities Ownership,” (June 2025) at 8-9, available at https://www.sec.gov/files/exploring-accreditedinvestors-june-2025.pdf. Qualifying criteria is not mutually exclusive, and individuals may qualify in multiple categories. Id. at 18, Table 6. 14% of accredited investors and 5% of the U.S. population are interested in investing in new or private companies. See Sarthak Pattnaik, et al., “Startups and Market Meltdowns: Understanding Survival and Success Factors in Entrepreneurial Settings,” SpringerNatureLink, (Nov. 29, 2024) at 343, available at https://link.springer.com/ chapter/10.1007/978-3-031-65314-8_15. A successful startup is defined as a startup that did not close. A startup that is acquired is still considered a successful startup. See Angel Capital Association, ”2025 Angel Funders Report,” (Aug. 22, 2025) at 54, available at https://angelcapitalassociation.org/angel-fundersreport/. Id. at 5, 16-18. See Jeff Sohl, “The Angel Market in 2024: A Stable Market Before the AI Frenzy,” Center for Venture Research, at 1, available at https://paulcollege. unh.edu/sites/default/files/media/2025-12/FY%20 2024%20Analysis%20Report%20Final.pdf. Id. Id. at 2. Id. at 1. S E C O FFIC E O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON 54 55 56 57 58 The pre-seed round definition overlaps some with the seed round definition. Typically, a preseed round is an investment in an idea. In other words, it is an investment in a product that has not yet found its market. On the other hand, a company may seek seed funding for a product that already exists and typically has some form of a customer base. See Crunchbase, “What is PreSeed Funding?,” (2025) available at https://about. crunchbase.com/blog/what-is-pre-seed-funding/. In addition, see Kyle Stanford, et al. “Venture Monitor Q2 2025,” PitchBook-NVCA, (July 14, 2025) at 39, available at https://pitchbook.com/ news/reports/q2-2025-pitchbook-nvca-venturemonitor. If the company is under 2 years old and the round is the first institutional investment in the company, the deal will be tagged as pre-seed unless otherwise stated. Regulatory filings under $10 million for deals where investors are unknown are classified as seed unless pre-seed parameters are met. In this report, where possible, pre-seed and seed data are combined and presented together. See https://www.sec.gov/jargon-z#SeedR. See Shubhi Nigam, “Seed funding,” Carta, (Apr. 2, 2025) available at https://carta.com/learn/startups/ fundraising/seed-funding/#pre-seed-vs-seed-vsseries-a; Gené Teare, “Seed Funding for Startups: How to Raise a Seed Round; Seed Rounds Got Larger Through The Downturn. Why Is That?,” Crunchbase, (Jan. 22, 2025) available at https:// news.crunchbase.com/seed/larger-downturnfunding-rounds-data/; Sergei Bogdanov, “How To Leverage Your Pre-Seed Funding For Rapid And Successful Growth,” Crunchbase News, (Apr. 18, 2025) available at https://news.crunchbase. com/venture/leverage-pre-seed-funding-growthbogdanov-yellow-rocks/; Ashley Neville and Kevin Dowd, “State of Private Markets: Q1 2025,” Carta, (May 13, 2025) available at https://carta. com/data/state-of-private-markets-q1-2025-fullreport/#key-trends; J.P. Morgan, “A guide to seed funding for startups,” (Sept. 24, 2024) available at https://www.jpmorgan.com/insights/banking/ commercial-banking/seed-funding-guide-howstartups-can-secure-seed-capital; Daniel Wheadon, “From Inception To Exit: Navigating the Lifecycle of a Tech Startup Company,” Cherry Bekaert, (June 6, 2025) available at https://www.cbh.com/ insights/articles/tech-startup-growth-from-seed-toexit/; Angel Capital Association, supra note 48, at 18, Figure 11; Mercury, supra note 11. See Kyle Stanford, et al., supra note 54, at Excel tab “Median Deal Size.” Undisclosed deals were excluded. This graph depicts median deal sizes for the Seed market. See Joanna Glasner, “Looking Back 10 Years, Seed Investors Envisioned A Different Future Unfolding,” Crunchbase News, (May 9, 2025) available at https://news.crunchbase.com/venture/ seed-funding-10-years-2015-2025-data/. 59 60 61 62 63 See Kevin Dowd, “The typical time between VC rounds is shrinking in SaaS and rising in fintech,” Carta, (Mar. 19, 2025) available at https://carta. com/data/time-between-VC-rounds-2024/. See Kyle Stanford, et al., supra note 54, at 9 and Excel tabs “Deal Activity” and “Pre-seed & Seed.” Undisclosed deals are excluded. See Right Side Capital Management, “Navigating the 2025 Fundraising Landscape,” (May 27, 2025) available at https://www.rightsidecapital.com/ blog/navigating-the-2025-fundraising-landscapestrategic-insights-for-early-stage-startups. See Gené Teare, supra note 56. This graphic is based on DERA data. Unless otherwise indicated, the data period for DERA data is July 1, 2024 to June 30, 2025. Data on offerings under Regulations D and Regulation Crowdfunding is based on information reported by companies and was collected from EDGAR filings (new filings and amendments) on Forms D and C, respectively. Data on registered offerings was collected from LSEG SDC Platinum database. For offerings under Regulation Crowdfunding, except where specified otherwise, estimates of the number of offerings are based on offerings completed during this period as shown on progress updates on Form C-U; estimates of amounts raised are based on proceeds reported in progress updates filed on Form C-U during the report period. For offerings under Regulation A, except where specified otherwise, estimates of the number of offerings are based on offerings qualified during this period, excluding post-qualification amendments; estimates of amounts raised are based on proceeds reported in filings made during the report period. Capital raised is based on information reported by companies in Forms 1-Z, 1-K, 1-SA, 1-U, and offering circular supplements pertaining to completed and ongoing Regulation A offerings and post-qualification amendments, and for companies whose shares have become exchange-listed, information from other public sources. Estimates represent a lower bound on the amounts raised given the timeframes for reporting proceeds following completed or terminated offerings and that offerings qualified during the report period may be ongoing. For the offerings that permit pooled investment funds, such as Rule 506(b) and (c) of Regulation D and registered offerings, the data excludes offerings conducted by pooled investment funds. Due to a change in methodology, SPACs are excluded from pooled investment funds and are included in the nonpooled fund issuers. STA FF R EPORT: FI SCA L YEA R 2025 | 81 64 65 66 67 82 | “Other exempt offerings” includes estimated amounts raised under Regulation S and Rule 144A for calendar year 2024. The data used to estimate the amounts raised in 2024 for other exempt offerings includes: (1) offerings under Regulation S that were collected from Refinitiv’s SDC Platinum service; and (2) resale offerings under Rule 144A that were collected from Refinitiv’s SDC New Issues database, the Mergent database, and the Asset-Backed Alert and Commercial Mortgage Alert publications, to further estimate the exempt offerings under Regulation S. The data excludes $1.138 trillion raised by asset-based issuers and $79 billion raised by other issuers where there was not sufficient data to be able to categorize as non-pooled fund or pooled fund issuers. We include amounts sold in Rule 144A resale offerings because those securities are typically issued initially in a transaction under Section 4(a) (2) or Regulation S but generally are not included in the Regulation S data identified above. These numbers are accurate only to the extent that these databases are able to collect such information and may understate the actual amount of capital raised under these offerings if issuers and underwriters do not make this data available. We do not yet have data to provide an estimated amount raised under Regulation S and Rule 144A for the 12-month period ended June 30, 2025. See https://www.sec.gov/resources-small-businesses/ cutting-through-jargon-z#E. See https://www.sec.gov/resources-small-businesses/ cutting-through-jargon-z#R. See https://www.sec.gov/resources-small-businesses/ cutting-through-jargon-z#P. Assets listed for registered funds includes mutual funds, ETFs, closed-end funds, and money market funds. See Securities and Exchange Commission Division of Investment Management Analytics Office, “Registered Fund Statistics, Form N-PORT Data, period ending December 2024,” (May 8, 2025) at 5, Table 2.1, available at https://www. sec.gov/files/investment/im-investment-registeredfund-statistics-20250508.pdf; Securities and Exchange Commission Division of Investment Management Analytics Office, “Money Market Fund Statistics, Form N-MFP Data, period ended June 2025,” (June 2025) at 6, Table 2.1, available at https://www.sec.gov/files/investment/mmfstatistics-2025-06.pdf; Securities and Exchange Commission Division of Investment Management Analytics Office, “Investment Adviser Statistics, Form ADV Data, period ending December 2024,” (Apr. 30, 2025) at 10, Table 4.1 and 12, Table 5.1, available at https://www.sec.gov/files/investment/ im-investment-adviser-statistics-20250430.pdf; Securities and Exchange Commission Division of Investment Management Analytics Office, “Investment Adviser Statistics, Form ADV Data, period ending December 2024,” (Apr. 30, 2025) at 10, Table 4.1 and 12, Table 5.1, available at https://www.sec.gov/files/investment/iminvestment-adviser-statistics-20250430.pdf. 68 69 70 71 72 See SEC Division of Investment Management Analytics Office, “Investment Adviser Statistics, Form ADV Data, period ending December 2024,” supra note 67, at 12, Table 5.1. This graphic is based on DERA data. For offerings under Rule 506(b) and (c) of Regulation D and registered offerings, the data only includes offerings conducted by pooled investment funds. “Other exempt offerings” includes estimated amounts raised under Regulation S and Rule 144A for calendar year 2024 for offerings conducted by pooled investment funds. See supra note 63 for a description of how these amounts were reported or estimated. This graphic is based on DERA data. The graphic only includes offerings conducted by pooled investment funds. See supra note 63 for a description of how the registered offering amounts were reported or estimated. Total and net flows into registered funds are estimated based on flows provided in SEC Division of Investment Management Analytics Office, “Registered Fund Statistics, Form N-PORT Data, period ending June 2025,” available at https://www.sec.gov/ files/investment/im-investment-registered-fundstatistics-20251117.pdf, at 9, Table 3.1, and estimated flows for money market funds derived from amounts reported on Form N-MFP, each over the 12-month period of July 1, 2024 through June 30, 2025. This graphic is based on DERA data. See supra note 63 for a description of how these amounts were reported or estimated. U.S. public companies raised: 81% of this capital in about 2,448 registered offerings and 17% of this capital in about 380 other exempt offerings. U.S. private companies raised: 57% of this capital in about 607 other exempt offerings and 40% of this capital in about 12,313 Rule 506(b) private placement offerings. This graphic is based on DERA data. See supra note 63 for a description of how these amounts were reported or estimated. This graphic presents capital raised in registered, Regulation D, and Regulation A offerings across the top industries from July 1, 2024 through June 30, 2025. Offerings by non-pooled investment funds in other industries accounted for approximately $51 billion, $59 billion, and $91 million in registered, Regulation D, and Regulation A offerings, respectively. SPACs accounted for approximately $18 billion in registered offerings. Regulation A and registered offerings were classified into industry groups based on the primary SIC code reported by the company. Industry groups were self-reported by companies on Form D. Differences in data sources and definitions may limit the comparability of industry data. Offerings by pooled investment funds, which accounted for approximately $11 billion and $2 trillion in registered offerings and Regulation D, respectively, are excluded from this graphic. S E C O FFIC E O F TH E ADVO CATE FOR SMA LL B USI N ESS CA PI TA L FOR MATI ON 73 74 75 76 77 78 79 80 81 82 83 84 85 See https://www.sec.gov/resources-small-businesses/ cutting-through-jargon-z#RC. See Angela Huang and Vladimir Ivanov, “Analysis of Crowdfunding Under the Jobs Act,” U.S. Securities and Exchange Commission, (May 28, 2025) at 10-11, Figure 3, available at https:// www.sec.gov/about/divisions-offices/divisioneconomic-risk-analysis/staff-papers-analyses/ analysis-crowdfunding-under-jobs-act. A SAFE or simple agreement for future equity is an agreement between a company and an investor in which the company promises to give the investor a future ownership interest in the company if certain triggering events occur, such as a future equity financing or an acquisition of the company. https:// www.sec.gov/resources-small-businesses/cuttingthrough-jargon-z#SAFE. See Angela Huang and Vladimir Ivanov, supra note 74, at 12, Table 3. Id. Id. Id. at 10, Table 2. See Brian Belley, “2024 Investment Crowdfunding: Trends, Stats, and Platform Rankings,” Kingscrowd, (Jan. 7, 2025) available at https:// kingscrowd.com/2024-investment-crowdfundingtrends-stats-and-platform-rankings/. Id. 2023’s average check size was $1,190 per investment. See Crowdfund Capital Advisors, “The 2025 State of Investment Crowdfunding. Insights, Trends, and Market Predictions,” (Feb. 20, 2025) at 111, available at https://crowdfundcapitaladvisors.com/ wp-content/uploads/2025/02/2025-IC-AnnualReport.pdf. This graphic is based on DERA data. Because of lags in offering qualifications, withdrawals, and abandonments, for greater comparability, this analysis considers all initiated Regulation Crowdfunding offerings and does not exclude offerings that are subsequently withdrawn or abandoned. Effective March 15, 2021, the maximum aggregate amount that an issuer is permitted to raise under Regulation Crowdfunding in a 12-month period was raised to $5 million (from $1.07 million). See https://www.sec. gov/resources-small-businesses/regulationcrowdfunding-guidance-issuers. See Angela Huang and Vladimir Ivanov, supra note 74, at 18. See https://www.sec.gov/resources-small-businesses/ cutting-through-jargon-z#RD. This graphic is based on DERA data. See supra note 63 for a description of how these amounts were reported or estimated. 86 87 88 89 90 91 92 93 94 This graphic is based on DERA data. See supra note 63 for a description of how these amounts were reported or estimated. In the graphic, offerings by 3(c)(7) funds include all funds that note on Form D that they qualify for the Section 3(c)(7) Investment Company Act exclusion, including funds that also note that they qualify for the Section 3(c)(1) Investment Company Act exclusion. Offerings by 3(c)(1) funds only include funds that note on Form D that they qualify for the Section 3(c)(1) Investment Company Act exclusion and do not also note that they qualify under Section 3(c)(7). This graphic is based on DERA data. See supra note 63 for a description of how these amounts were reported or estimated. This excludes operating companies that declined to disclose their year of incorporation. There were 3,090 nondisclosures in the 12-month time frame ending on June 30, 2023. There were 2,857 non-disclosures in the 12-month time frame ending on June 30, 2024, and 2,991 non-disclosures in the 12-month time frame ending on June 30, 2025. See https://www.sec.gov/resources-small-businesses/ cutting-through-jargon-z#RA. This graphic is based on DERA data. See supra note 63 for a description of how these amounts were reported or estimated. Because of lags in offering qualifications, withdrawals, and abandonments, for greater comparability, this analysis considers all initiated Regulation A offerings (whether qualified or not) and does not exclude offerings that are subsequently withdrawn or abandoned. Due to lags and bunching in proceeds data and temporary relief provided to Regulation A in March 2020, the dollar amounts in this graphic are based on the amounts sought (in $ million) in qualified Regulation A offerings and not on reported proceeds. Effective March 15, 2021, the maximum aggregate amount that an issuer was permitted to raise under Tier 2 of Regulation A in a 12-month period was raised to $75 million (from $50 million). See https://www. sec.gov/resources-small-businesses/regulationguidance-issuers. See Angela Huang, “Analysis of the Regulation A Market: A Decade of Regulation A,” (May 2025) at 8, available at https://www.sec.gov/files/derareg-2505.pdf. Id. at 3. Id. at 3. Id. at 3. Id. at 1, 8, 9. Average issuer age is the years since incorporation. STA FF R EPORT: FI SCA L YEA R 2025 | 83 95 The Office tracks this data in furtherance of Section 4(j)(4)(C) of the Exchange Act, as amended by the Small Business Advocate Act of 2016. That provision directs the Advocate to “identify problems that small businesses have with securing access to capital, including any unique challenges to minority-owned small businesses, women-owned small businesses, and small businesses affected by hurricanes or other natural disasters.” See Small Business Advocate Act of 2016, as amended, available at https://www.sec.gov/files/Small%20 Business%20Advocate%20Act%20of%202016as%20amended.pdf. 96 See United States Census Bureau, “Nonemployer Statistics by Demographics series (NES-D): Statistics for Employer and Nonemployer Firms by Industry and Sex for the U.S., States, Metro Areas, Counties, and Places: 2023,” (last accessed Nov. 25, 2025) available at https://data.census. gov/table/ABSNESD2023.AB00MYNESD01A. In 2022, women-owned employer firms employed 11,380,866 and equally owned businesses employed 6,784,242. In 2023, women-owned employer firms employed 11,686,613 and equally owned businesses employed 6,904,769. In 2022, 1,309,282 employer firms were women-owned and 706,324 were equally owned. In 2023, 1,356,990 employer firms were women-owned and 707,385 were equally owned. 97 See Babson College, supra note 7, at 10, 72, Figure 40. 19% of total U.S. population participate in entrepreneurial activities. 98 See United States Census Bureau, supra note 94. Businesses are of employer firms. In 2023, 1,356,990 were women-owned and 707,385 were equally owned. 99 Id. In 2023, women-owned employer firms employed 11,686,613 and equally owned businesses employed 6,904,769. 100 See Wells Fargo, “2025 Report: The Impact of Women-Owned Businesses,” (Jan, 2025) at 12, available at https:// www.wippeducationinstitute.org/_files/ ugd/2f8f8e_4330c836da414d2ea7c6ea93b80bd6a4. pdf. Here, grew by is used interchangeably with growth rate. From 2019 to 2024, the growth rate of men-owned businesses was 12%. 101 Id. at 7, 10, 31-32; Babson College, supra note 7, at 63; H&R Block, “2024 State of Women‘s Small Business Report,” (Oct. 8, 2024) at 7, 10, available at https://resource-center.hrblock.com/wp-content/ uploads/2024/10/2024-State-of-Womens-SmallBusiness-Report-by-Block-Advisors-ExecutiveSummary-2.pdf. 102 See H&R Block, “2024 State of Women’s Small Business Report,” supra note 101, at 7, 10. 103 Id. 104 Id. at 8. 84 | 105 Id. 106 See Federal Reserve Banks, “2025 Report on Employer Firms: Findings from the 2024 Small Business Credit Survey,” supra note 10, at Excel tab “Gender of owner(s),” question “Primary reason for not applying for financing.” 107 See Federal Reserve Banks, “2025 Report on Employer Firms: Findings from the 2024 Small Business Credit Survey,” supra note 10, at Excel tab “Gender of owner(s),” question “Total amount of financing sought in prior 12 months.” Womenowned businesses include businesses where the majority of the founders are women. Men-owned businesses include businesses where the majority of the founders are men. 108 Id. 109 See Brian Belley, supra note 79. 110 Id. 111 Id. 112 Undisclosed deals were excluded. See Kyle Stanford, et al., supra note 54, at 18 and Excel tab “Deal Activity” and “Pre-seed & Seed”. 113 Undisclosed deals were excluded. Id. 114 See United States Census Bureau, “National Population by Characteristics: 2020-2024” at Table “Sex, Race, and Hispanic Origin,” (last accessed Dec 9, 2025) available at https:// www.census.gov/data/tables/time-series/demo/ popest/2020s-national-detail.html. Population estimates are as of July 1, 2024. United States Census Bureau, “Nonemployer Statistics by Demographics series (NES-D): Statistics for Employer and Nonemployer Firms by Industry, Sex, Ethnicity, Race, and Veteran Status for the U.S., States, Metro Areas, Counties, and Places: 2023,” (last accessed Dec 9, 2025) available at. Data is included for non-employer business owners. https://data.census.gov/table/ ABSNESD2023.AB2300NESD01?q=ab2300. Data is included for non-employer business owners. 115 Id. Native American/Pacific Islander persons made up 1.58% of business owners, and their population share was 1.67%. Native American/ Pacific Islander persons include busin [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Asec%3A448fa56f7d1bb76a. Public record. Not legal advice.