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U.S.
SECURITIES
AND
EXCHANGE
COMMISSION
R E P O R T O N T H E 4 1 ST A N N U A L
SMALL
BUSINESS
FORUM
04.04—07.2022
The U.S. Securities and Exchange Commission (SEC) annually hosts the Government-Business
Forum on Small Business Capital Formation. The recommendations contained in this report
were developed and drafted by the 2022 Forum participants. The recommendations are not
endorsed or modified by the SEC and, as with the remarks of SEC Commissioners and staff
published in this report, do not necessarily reflect the views of the SEC, its Commissioners, or
any of the SEC’s staff members.
Digital copies of the prior reports and other materials relating to previous Forums, dating back
to 1993, are available online.
FORUM AT A GLANCE
4
6
DAYS
HOURS
of content
1,302
20
VIEWS
21
POLICY
recommendations
462
tweets from
@SECGov
views of our
EDUCATIONAL RESOURCES
and PUBLICATIONS
1 click
to ENGAGE
REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM | i
CONTENTS
FORUM HIGHLIGHTS........................................................................................................................... 1
Day 1: Empowering Entrepreneurs
Tools to Navigate Capital Raising............................................................................. 3
Day 2: Hometown Entrepreneurship
How Entrepreneurs Can Thrive Outside of
Traditional Capital Raising Hubs...............................................................................8
Day 3: New Investor Voices
How Emerging Fund Managers Are Diversifying Capital.............................13
Day 4: Small Cap World
What to Know and How to Think Ahead............................................................ 18
ADVISORY PLANNING GROUP...................................................................................................23
SEC OFFICIALS’ REMARKS...........................................................................................................25
Martha Legg Miller, Advocate for Small Business Capital Formation..................25
Chair Gary Gensler.................................................................................................................... 28
Commissioner Hester M. Peirce.............................................................................................31
Commissioner Allison Herren Lee...................................................................................... 33
Commissioner Caroline A. Crenshaw................................................................................ 35
Pam Gibbs, Office of Minority and Women Inclusion.................................................37
Renee Jones, Division of Corporation Finance.............................................................40
ABOUT THE OFFICE OF THE ADVOCATE
FOR SMALL BUSINESS CAPITAL FORMATION................................................................... 42
REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM | iii
A G E N DA
Monday, Ap
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Empowerin
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Tools to nav
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FORUM HIGHLIGHTS
The 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.1 The Forum
covers a broad range of issues affecting small businesses and their investors, from early-stage
entrepreneurial ventures to smaller public companies.
This year marked the 41st Forum, which the SEC hosted virtually over four days from
April 4 to 7, 2022. Each day featured a different topic, with speakers highlighting success
stories as well as areas for policy improvement.
The SEC’s Office of the Advocate for Small Business Capital Formation leads the event, in
collaboration with each of the Commissioners and many other offices and divisions across
the agency.
POLICY RECOMMENDATIONS
A hallmark of the Forum is the opportunity for participants to develop policy recommendations
to improve capital raising. Based on feedback from prior Forums, and consistent with last year’s
event, we invited participants to submit recommendations in advance, as well as “chat” them in
during the live event. Doing so fostered a more inclusive environment where all voices could be
heard while being efficient with participants’ time.
At the conclusion of each day’s panel discussion, participants used online voting to prioritize
the relevant recommendations based on their perception of the positive impact it would have
on capital formation. This report includes the top five recommendations from each day.
Alongside each recommendation is a response from the Commission, noting any corresponding
policy initiatives that have been made public.2 The Commission will consider Forum
recommendations alongside other public comments for relevant policy initiatives.
REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM | 1
ENGAGING PUBLIC PARTICIPANTS
Participants in the Forum bring a breadth of perspectives to the policy deliberations, approaching
the capital raising ecosystem from a variety of backgrounds, geographies, and life cycle stages.3
4
SEC
COMMISSIONERS
12
SEC STAFF
appearances
Average of
321
ATTENDEES
each day
11
SEC SMALL
BUSINESS
ADVOCACY
team members
12
guest
PANELISTS
336
registered
participants from
41 U.S. STATES and
territories and
22 COUNTRIES
2 | REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM
DAY 1: EMPOWERING ENTREPRENEURS
Tools to Navigate Capital Raising
Agenda
1:00 P.M.
Welcome Remarks from Martha Legg Miller, SEC Small Business
Advocacy Team
1:05 P.M.
Remarks from SEC Chair Gary Gensler
1:10 P.M.
Remarks from Pamela Gibbs, Division of Women and
Minority Inclusion
1:15 P.M.
Panel Discussion, moderated by Amy Reischauer, SEC Small
Business Advocacy Team
2:00 P.M.
Closing Remarks from Julie Zelman Davis, SEC Small Business
Advocacy Team
2:05 P.M.
Voting to Prioritize Policy Recommendation Submissions
Panel Speakers
CAROLINE CUMMINGS
Chief Executive Officer
RAIN (Regional Accelerator & Innovation Network)
Eugene, OR
83% of entrepreneurs, small businesses
and startups, just don’t qualify for
traditional lending or traditional venture
financing…Maybe the door was slammed
on them, or maybe they don’t even know
where the door is, let alone how to get in.
Caroline co-founded and served as CEO of two technology startups, raising close to $1 million
for her ventures. She has helped many other entrepreneurs raise millions in capital. She has also
personally invested in 21 startup companies and was instrumental in recruiting more women to join
angel and venture funds in Oregon. At RAIN, she provides outreach and support to small and rural
communities globally, coaches and mentors underrepresented entrepreneurs, and builds strategic
partnerships where the goal is to reduce barriers to starting a business.
REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM | 3
It is important not to give up. The
resources are there. Find the resources,
find the people, and just don’t give up.
ARMEER KENCHEN
Executive Director
CornerSquare Community Capital, North Carolina Rural Center
Raleigh, NC
Armeer leads the North Carolina Rural Center’s small business credit initiatives as well as
CornerSquare Community Capital, and has more than 25 years of experience working with
CDFIs, non-profit and community development organizations. Prior to joining the Rural Center, he
served in a variety of executive leadership roles, including as Executive Vice President at Self-Help
and CEO of Generations Community Credit Union.
BETTY WONG
Co-Founder
Stage2Startups
New York, NY
There are a lot of people out there
with great ideas…These are unicorn
type companies that can generate
a lot of benefit for our society, and
yet these people are lost in terms of
how to raise money.
Betty co-founded Stage2Startups to help mid-career and senior professionals, who are often
overlooked among founders, transition to entrepreneurship, with a special focus on women,
people of color, LGBTQ, immigrants, and veterans. Betty herself is an entrepreneur with C-suite
experience, having launched over 30 products for both Fortune 500 and smaller companies,
nonprofits, and government entities.
4 | REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM
Highlights from Panel Discussion
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Entrepreneurs should be made aware of resources that are available when raising capital.
There are many entrepreneurs with great ideas but who lack knowledge about and experience
with raising capital.
Capital should be accessible not only to underrepresented groups but also to underrepresented
locales outside of the traditional tech-hub hotspots such as New York or Silicon Valley.
One of the biggest resources for new entrepreneurs is having relationships with entrepreneurs
who have been through the process. You have to turn over every stone, but many new
entrepreneurs do not know where the stones are.
A thriving capital market means more jobs. There is a direct connection between lack of
capital and lack of other opportunities. There is a real connection between having capital and
having an overall better quality of life.
Surround yourself with people who are different from you, and welcome their opinions. Allow
yourself to be a little uncomfortable. Do not underestimate anyone in your circle. Have an
open mind and explore all of your options.
Participants' Policy Recommendations
Ensure capital raising rules provide equitable access to capital for
underrepresented founders and investors
COMMISSION RESPONSE
Fair and efficient capital markets are important to protecting underrepresented founders and
investors. To that end, the Commission regularly evaluates ways to improve its capital raising rules,
and the Spring 2022 Regulatory Agenda includes initiatives to consider further updates to the
Commission’s rules related to exempt offerings.4 If the Commission pursues a rulemaking in any
of these areas, the Commission will carefully balance concerns relating to the impact on companies
participating in the U.S. capital markets (including those led by underrepresented founders) with the
regulatory objectives of the rules, and carefully weigh the public comments to achieve the appropriate
balance. Ensuring investor confidence in capital markets and disclosure is a crucial ingredient in
capital formation, including capital formation for small business and underrepresented entrepreneurs.
In addition, the SEC Investor Advisory Committee submitted a series of recommendations to the
Commission in March 2021 to address systematic wealth gaps in our country and ensure that
minority communities have greater investment opportunities.5 In August 2020 and May 2021, the
SEC Small Business Capital Formation Advisory Committee submitted recommendations for the
Commission to promote access to capital for underrepresented founders and investors, including
women, minorities, and founders outside of prominent tech hubs.6 This committee also submitted
recommendations in March 2022 regarding a potential rulemaking on the definition of accredited
investor that noted concern that raising the financial thresholds of this definition could have
disproportionate impacts on various demographic groups, making the definition less inclusive and
widening the nation’s racial wealth gap.7 The Commission will consider these recommendations and
this Forum recommendation in connection with any relevant regulatory initiatives.
REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM | 5
Support entrepreneurs who lack the technical assistance
to understand how to access traditional capital
COMMISSION RESPONSE
The Commission supports efforts to provide and improve accessibility of educational and technical
resources to support entrepreneurs and their investors. In 2021, the SEC’s Small Business Advocacy
Office, in partnership with other SEC offices and divisions, launched the following online
educational resources:
• Capital Raising Hub8: a centralized portal for educational resources for entrepreneurs
and their investors with tools to assist in raising capital from investors.
• Cutting Through the Jargon9: a glossary of key terms that makes the language of capital
raising more accessible to small businesses and their investors.
• Navigate Your Options10: an interactive tool that explores regulatory pathways available
to raise capital, through which users answer a series of questions to identify the most
relevant pathways to raise capital based on their specific needs.
• Capital Trends Maps11: data on where capital is being raised across the country under
various offering pathways.
• Building Blocks12: a suite of educational materials that break down fundamental
securities law concepts into plain language.
• Emerging Fund Managers13: a series of virtual events to empower a new generation of
investment decision makers and increasing diversity among capital allocators.
The resources were developed based on feedback received directly from prospective users during
outreach. As a part of broader efforts to make SEC resources more accessible and in response to
feedback from small businesses, the SEC recently merged its legacy small business resources page
into the new Capital Raising Hub, which is now directly accessible under the “Education” tab on
the SEC’s homepage. The SEC’s Small Business Advocacy Office, in partnership with other SEC
offices and divisions, has engaged with small businesses, investors, and thought leaders in the
market to highlight these new educational resources, and will continue to seek engagements with
diverse audiences across the country.
The Commission welcomes continued engagement and ideas to improve the resources.
6 | REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM
Utilize technology and educational resources to help facilitate
small business capital markets and decentralize and democratize
capital markets
COMMISSION RESPONSE
The Commission supports efforts to improve accessibility of educational resources and technology
to help facilitate small business capital markets. As described above, in 2021, the SEC’s Small
Business Advocacy Office, in partnership with other SEC offices and divisions, launched several
educational resources to support entrepreneurs and their investors and has taken steps to improve
the accessibility of its educational resources.
The Commission welcomes continued engagement and ideas to improve the resources and
technology available for participants in the small business capital markets.
In considering any changes to the private capital markets, ensure
companies have viable pathways to access capital to allow growth
and innovation
COMMISSION RESPONSE
The Commission welcomes ideas for how the federal securities laws can facilitate cost-effective
access to capital for companies of all sizes while maintaining investor protection. The Spring 2022
Regulatory Agenda includes initiatives to consider updates to the Commission’s rules related to
exempt offerings, including potential updates to Regulation D, Form D, and Rule 144. These
initiatives recognize that investor protection and investor confidence in capital markets provide
the bedrock for small business capital formation. The Commission will consider this Forum
recommendation, in connection with any such initiatives.
Revise Regulation Crowdfunding to permit investment companies
to conduct a Regulation Crowdfunding offering
COMMISSION RESPONSE
Section 4A(f)(3) of the Securities Act prohibits investment companies, as defined in the Investment
Company Act (or companies that are excluded from the definition of an investment company under
section 3(b) or 3(c) of the Investment Company Act), from using the Regulation Crowdfunding
exemption. Because the prohibition on investment companies originates in this statutory
provision, an amendment to Section 4A(f)(3) to permit investment companies under Regulation
Crowdfunding’s eligibility criteria would require Congressional action.
REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM | 7
DAY 2: HOMETOWN ENTREPRENEURSHIP
How Entrepreneurs Can Thrive Outside of Traditional
Capital Raising Hubs
Agenda
1:00 P.M.
Welcome Remarks from Sebastian Gomez Abero, SEC Small
Business Advocacy Team
1:05 P.M.
Remarks from Commissioner Hester M. Peirce
1:10 P.M.
Introduction by Martha Legg Miller, SEC Small Business
Advocacy Team
1:15 P.M.
Panel Discussion, moderated by Julie Zelman Davis, SEC Small
Business Advocacy Team
2:00 P.M.
Closing Remarks from Sarah Kenyon, SEC Small Business
Advocacy Team
2:05 P.M.
Voting to Prioritize Policy Recommendation Submissions
Panel Speakers
VICTOR GUTWEIN
Networking needs to be intentional. The
more people that hear your story, the
more people that can help you out or may
have a connection. [Think] big and don’t
be afraid to pitch big vision.
Founder and Managing Partner
M25
Chicago, IL
Victor founded M25 to provide early-stage capital to tech startups headquartered in the Midwest.
The firm has since grown to become the most active venture firm in the region. Victor has a
passionate history with startups, including founding a vending machine business and kick scooter
company. Victor is a Kauffman Fellow (Class 22) and a former leader in Hyde Park Angels.
8 | REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM
Indigenous women-owned businesses
are an $11 billion industry, without
any resources, tools, or real capital.
Imagine what it would look like if we
invested in them.
VANESSA ROANHORSE
CEO | Co-founder
Roanhorse Consulting | Native Women Lead
Albuquerque, NM
Vanessa founded Roanhorse Consulting, an Indigenous women-led think tank to encourage
economic empowerment through entrepreneurship. She is also a co-founder of Native Women
Lead, a nonprofit that fosters a connected community of Native/Indigenous women entrepreneurs.
Her many professional and civic leadership roles are united by a focus on social, environmental,
and economic change.
JORDAN WALKER
Co-Founder
Yac
Orlando, FL
Remote work has broken down
barriers…Entrepreneurs and investors
alike have begun to realize building
in siloed cities creates dangerous echo
chambers. It’s possible to build a real
business from anywhere.
Jordan co-founded Yac in 2019, an audio-first messaging platform to enrich communication
among teams using voice rather than text or video. After developing the prototype during a
hackathon contest, the company subsequently raised over $10 million from multiple professional
investors. In addition, Jordan creates experience-driven designs for apps, websites, and VR/AR
through his company SoFriendly.
REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM | 9
Highlights from Panel Discussion
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Increasingly, investors are seeking out companies that are not located on a coast. Different
regions can have advantages in terms of cost of living and the ability to find unique talent
and work more closely with their customers.
Historically, venture capital has been a game where you have to know people. As people
have grown more comfortable with remote work, there has been an opening up, and
entrepreneurs have more opportunities to reach out.
Recent tech company successes in the Midwest region have motivated those entrepreneurs to
redeploy that capital locally. Angel investing has always been highly localized, and now there
are more cities with their own crop of angel investors deploying money locally.
For many non-Native investors, there is a lack of understanding about how tribal
sovereignty, Native relationships, and history play into what Indigenous founders are
looking for and what resources are needed. There is a long history in the United States where
Native Americans have given up ownership of something and did not get back what they
expected.
In some ways, VCs’ high-growth model does not align with what many Indigenous founders
are building – local, sustainable businesses that consider the impact on the earth and
community as well as on the bottom line. It is going to take a different kind of system that
incorporates this understanding into the funding.
Participants' Policy Recommendations
Expand the accredited investor definition to achieve greater diversity
among startup investors and entrepreneurs
COMMISSION RESPONSE
The Spring 2022 Regulatory Agenda includes a potential release seeking public comment on ways
to further update the Commission’s rules related to exempt offerings to more effectively promote
investor protection, including updating the financial thresholds in the accredited investor definition.
The Commission will consider this Forum recommendation in connection with any such release
and any other relevant initiatives.
10 | REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM
Expand the accredited investor definition to include additional
measures of sophistication
COMMISSION RESPONSE
In 2020, the Commission adopted amendments to the definition of “accredited investor” under
Regulation D of the Securities Act that added new categories of qualifying natural persons and
entities and made certain other modifications to the definition.14 This included amendments allowing
natural persons to qualify as accredited investors based on certain professional certifications,
designations, or credentials. The amended rule includes a nonexclusive list of attributes that the
Commission will consider in determining which professional certifications and designations or other
credentials qualify a natural person for accredited investor status. In a related order, the Commission
designated holders in good standing of the Series 7 (Licensed General Securities Representative),
Series 65 (Licensed Investment Adviser Representative), and Series 82 (Licensed Private Securities
Offerings Representative) licenses as accredited investors.15 The Commission may designate
additional qualifying professional certifications, designations, and other credentials by order. In
addition, the SEC Small Business Capital Formation Advisory Committee has recommended
that, in a potential rulemaking regarding the definition of accredited investor, the Commission
consider alternative methods for investors to qualify as sophisticated, noting that this could include
investment experience, knowledge gained through work experience or membership in associations,
education credentials, additional professional certifications, or tests to demonstrate sophistication.16
The Spring 2022 Regulatory Agenda includes a potential release seeking public comment on ways
to further update the Commission’s rules related to exempt offerings to more effectively promote
investor protection, including possible updates to the financial thresholds in the accredited investor
definition. The Commission will consider this Forum recommendation in connection with any such
release and any other relevant initiatives.
Expand the accredited investor definition to include any person
who invests not more than 10% of the greater of his/her annual
income or net assets
COMMISSION RESPONSE
The Spring 2022 Regulatory Agenda includes a potential release seeking public comment on ways
to further update the Commission’s rules related to exempt offerings to more effectively promote
investor protection, including possible updates to the financial thresholds in the accredited investor
definition. The Commission will consider this Forum recommendation in connection with any such
release and any other relevant initiatives.
REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM | 11
In considering changes that raise the wealth thresholds in
the accredited investor definition, consider the unintended
consequences on access to capital in under-resourced and
underrepresented communities
COMMISSION RESPONSE
The Commission is mindful of concerns about how our capital markets are serving underrepresented
founders and investors. In addition, the SEC’s Small Business Capital Formation Advisory
Committee recently considered the wealth gap among different racial and ethnic groups, as well as
across different geographic communities, in connection with its recommendations on the definition
of “accredited investor.”17 The Spring 2022 Regulatory Agenda includes a potential release seeking
public comment on ways to further update the Commission’s rules related to exempt offerings to
more effectively promote investor protection, including possible updates to the financial thresholds
in the accredited investor definition. The Commission will consider this Forum recommendation in
connection with any such release and any other relevant initiatives.
Finalize the Commission’s finders order
COMMISSION RESPONSE
In October 2020, the Commission proposed an exemptive order that would permit natural persons
to engage in certain limited activities involving accredited investors without registering with the
Commission as a broker-dealer.18 In connection with that proposal, the Commission requested public
comment on all aspects of the proposed exemption. Finalizing the proposal is not included in the
Commission’s Spring 2022 Regulatory Agenda.
12 | REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM
DAY 3: NEW INVESTOR VOICES
How Emerging Fund Managers Are Diversifying Capital
Agenda
1:00 P.M.
Welcome Remarks from Jenny Riegel, SEC Small Business
Advocacy Team
1:05 P.M.
Remarks from Commissioner Allison Herron Lee
1:10 P.M.
Remarks from William Birdthistle, Division of Investment Management
1:15 P.M.
Introduction by Martha Legg Miller, SEC Small Business Advocacy Team
1:20 P.M.
Panel Discussion, moderated by Sebastian Gomez Abero,
SEC Small Business Advocacy Team
2:00 P.M.
Closing Remarks from Kim Dinwoodie, SEC Small Business
Advocacy Team
2:10 P.M.
Voting to Prioritize Policy Recommendation Submissions
Panel Speakers
BRANDON BROOKS
Founding Partner
Overlooked Ventures
Columbus, OH
Every new emerging fund manager is fighting
for the same small slice of pie, while there’s
still $50B out there going to the historic funds
that have been around for a long time. I can’t
believe we’re all fighting gladiator-style or
Hunger Games-style to get a slice of the pie.
Brandon is a tech entrepreneur and the founding partner at Overlooked Ventures, where he
brings his passion about helping overlooked founders take their startups to the next level through
access to capital, resources, and connections to scale their businesses. Brandon bootstrapped his
own startup, Inventrify.
REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM | 13
I had the fortune of access to networks because I
went to the right schools, but it’s very difficult for
Black, Brown, Asian, other founders. They don’t
have that access because they weren’t granted
that access in the first place…If you don’t break
into that circle it’s very hard to be noticed.
DAVE LU
Managing Partner
Hyphen Capital
San Francisco, CA
Dave Lu founded Hyphen Capital to provide early-stage capital to the next generation of Asian
American founders. He brings over 20 years of technology operating experience to the companies
in which he invests, having worked at multiple iconic Silicon Valley technology companies and
subsequently founding his bootstrapped startup Fanpop and venture-backed startup Pared.
ERICA DUIGNAN MINNIHAN
Founder and General Partner
Reign Ventures
New York, NY
Female GPs, GPs of color, first time GPs, we have
to do a lot to get in front of these potential investors
and convince them why we’re better. If you are
different in whatever way, you’re going to have
extra work to do to convince that asset manager
to take a risk on you, to try your…uniquely
differentiated investment strategy and that you as a
manager [can] create outsized returns for them.
Erica Duignan Minnihan is co-founder and General Partner of Reign Ventures, a seed-stage venture
capital firm investing in consumer tech and enterprise software companies. Reign Ventures is
committed to promoting racial inclusivity and gender equity in the venture capital markets. Erica
runs the firm’s New York City office, where she also is actively involved with her alma mater,
Columbia Business School, to cultivate and support the entrepreneurial ecosystem.
14 | REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM
Highlights from Panel Discussion
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Success with institutional LPs is critical to the ability to go on to raise additional
commitments from private institutional endowments and other institutional LPs.
There has been progress with underrepresented GPs obtaining commitments from
institutional LPs after the events of the summer of 2020 surrounding racial justice. Those
commitments, however, are still small compared to the LPs’ total portfolio.
Every new emerging fund manager is fighting for the same small slice of pie set aside by the
institutional LPs.
Accessing VC funding remains very difficult for Black, Brown, Asian, Indigenous and other
minority founders.
Capital raising is all about network and access, and many minority founders do not have
relationships with institutional LPs because they are not in the same circles.
There still is not a lot of VC funding in overlooked cities outside the coasts.
Participants' Policy Recommendations
Create a new private fund exemption to allow states to foster
intrastate and regional funds focused on community-based investing
that is open to non-accredited investors
COMMISSION RESPONSE
The Commission supports collaboration among the SEC’s Division of Investment Management,
Division of Corporation Finance, Small Business Advocacy Office, and the Small Business Capital
Formation Advisory Committee to explore ways to enhance community-based investing.
In connection with increasing access to capital, the Commission adopted a set of rule amendments
designed to facilitate capital formation and increase opportunities for investors by expanding access
to capital for small and medium-sized businesses and entrepreneurs across the United States.19
In February 2022, the SEC’s Small Business Capital Formation Advisory Committee met and
discussed how the accredited investor definition impacts capital raising opportunities for early-stage
companies that raise capital through exempt offerings.20 In addition, in 2021, that same advisory
committee explored ways to improve access to capital for underrepresented founders and investors
and encourage small, regional funds.21
Finally, the Commission regularly evaluates ways to expand and diversify access to capital, and will
consider this Forum recommendation in connection with these efforts.
REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM | 15
Increase the thresholds (number of investors and cap on fund size)
allowed in 3(c)(1) funds to achieve greater diversity among startup
investors and entrepreneurs
COMMISSION RESPONSE
A 3(c)(1) fund is a type of pooled investment vehicle that is excluded from the definition of
“investment company” under the Investment Company Act of 1940 (1940 Act) because it has no
more than 100 beneficial owners and otherwise meets criteria outlined in Section 3(c)(1) of the
1940 Act. 3(c)(1) funds are often used by venture capital firms and other early-stage investors who
pool capital for investment in startups.
A “qualifying venture capital fund” is a type of private fund that is excluded from the definition of
“investment company” under Section 3(c)(1) of the 1940 Act.
Any amendments to Section 3(c)(1) would require Congressional action.
Support underrepresented emerging fund managers—specifically
minorities and women—building funds that diversify capital allocators,
engage sophisticated investors, and challenge pattern matching trends
COMMISSION RESPONSE
The Commission supports efforts to improve diversity among fund managers and entrepreneurs
who raise capital. As described above, in 2021, the SEC’s Small Business Advocacy Office, in
partnership with other SEC offices and divisions, launched several educational resources to support
entrepreneurs and their investors, including content to help support underrepresented emerging
fund managers, their investors, and their portfolio companies.22
The SEC’s Small Business Capital Formation Advisory Committee submitted recommendations in
2020 and 2021 for the Commission to promote increased opportunities for diverse entrepreneurs
and investors.23 The SEC’s Investor Advisory Committee submitted recommendations in March
2021 to address systematic wealth gaps and ensure that minority organizations have greater
investment opportunities.24 In addition, the SEC’s Office of the Investor Advocate has sought to
engage with diverse communities, including investors in the disability community, ethnic-based
groups, veterans, and young adults.25
The SEC’s Asset Management Advisory Committee and its Subcommittee on Diversity and
Inclusion recommended that the Commission focus on transparency of business practices for
consultants who recommend investment advisers and investment funds to improve diversity among
asset managers.26 Finally, the SEC’s Asset Management Advisory Committee and the Commission
have also elevated and prioritized the goal of increasing and promoting diversity, equity, and
inclusion in the asset management industry.27
The Commission will consider this Forum recommendation in connection with these and
other initiatives.
16 | REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM
Increase the number of investors allowed in 3(c)(1) funds
above 99 investors
COMMISSION RESPONSE
As noted above, a 3(c)(1) fund is a type of pooled investment vehicle that is excluded from the
definition of “investment company” under the 1940 Act because it has no more than 100 beneficial
owners and otherwise meets criteria outlined in Section 3(c)(1) of the 1940 Act.
Any amendments to Section 3(c)(1) to change the number of investors allowed would require
Congressional action.
Support underrepresented and emerging fund managers and their
investors through targeted resources, in collaboration with other
federal agencies
COMMISSION RESPONSE
The Commission supports efforts to improve accessibility of educational and technical resources to
improve diversity among fund managers and investors. As described above, in 2021, the SEC’s
Small Business Advocacy Office, in partnership with other SEC offices and divisions, launched
several educational resources to support entrepreneurs and their investors. The following educational
resources available through the SEC’s new Capital Raising Hub28 include content to help support
emerging fund managers and their investors:
• Cutting Through the Jargon29: a glossary of key terms that makes the language of capital raising
more accessible to small business owners and their investors. The glossary includes foundational
terminology, along with small business investing terminology, and fund-specific terminology.
• Capital Trends Maps30: data on where capital is being raised across the country under various
offering pathways.
• Building Blocks31: a suite of educational materials that break down fundamental securities law
concepts into plain language, including accredited investors, general solicitation, private funds,
exits and liquidity, and the consequences of non-compliance.
• Emerging Fund Managers32: a series of virtual events to empower a new generation of investment
decision makers and increasing diversity among capital allocators.
The resources were developed based on feedback received directly from prospective users during outreach.
The SEC’s Small Business Advocacy Office, in partnership with other SEC offices and divisions, has engaged
with small businesses, investors, and thought leaders in the market to highlight these new educational
resources, and will continue to seek engagements with diverse audiences across the country. A number of
these events have already included collaboration with staff from other federal agencies, including the Small
Business Administration, the U.S. Department of Commerce, and the U.S. Department of the Treasury.33
The Commission welcomes ideas from underrepresented and emerging fund managers and their investors
for specific resources and programming that would be most impactful to improve diversity among
investment decision-makers.
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DAY 4: SMALL CAP WORLD
What to Know and How to Think Ahead
Agenda
1:00 P.M.
Welcome Remarks from Jenny Choi, SEC Small Business
Advocacy Team
1:05 P.M.
Remarks from Commissioner Caroline A. Crenshaw
1:10 P.M.
Remarks from Renee Jones, Division of Corporation Finance
1:15 P.M.
Introduction by Martha Legg Miller, SEC Small Business
Advocacy Team
1:20 P.M.
Panel Discussion, moderated by Jenny Riegel, SEC Small
Business Advocacy Team
2:05 P.M.
Closing Remarks from Martha Legg Miller, SEC Small Business
Advocacy Team
2:10 P.M.
Voting to Prioritize Policy Recommendation Submissions
Panel Speakers
ADAM J. EPSTEIN
Founder
Third Creek Advisors, LLC
San Francisco, CA
It’s a small percentage of small caps that are terrific
at shareholder engagement and terrific at capital
engagement, but there are two things they do really
well: they tell really easy to understand, concise,
dynamic stories, and they tell them to investors who are
most likely to have interest in what they’re doing. You
need both of those, especially in turbulent markets.
A former institutional investor, Adam now provides capital markets insights to Small-Cap Institute,
Inc.’s editorial board, is a contributor to Nasdaq’s small-cap content platform, and serves as a
mentor at the Nasdaq Entrepreneurial Center. In 2012, he authored The Perfect Corporate Board:
A Handbook for Mastering the Unique Challenges of Small-Cap Companies (McGraw Hill, 2012).
18 | REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM
Being a public company, you’re held to a standard
that is very different from a private company.
That discipline, if you can survive it, can only
make you stronger. As painful as it is, it raises
the bar and makes you a stronger and more
transparent company, and that’s really essential to
survive and thrive in the small cap market.
PETER HOLT
President and Chief Executive Officer
The Joint Corp.
Scottsdale, AZ
Peter is the chief executive at The Joint (JYNT), a Nasdaq-traded company that operates the largest
franchise network of chiropractic clinics in the world. Prior to taking the helm at The Joint, Peter
held multiple leadership roles with both domestic and international companies. Peter also advises
Stage Six in their support of sustainable franchises scaling in emerging markets worldwide.
KRISTOPHER SIMPSON
Senior Vice President and General Counsel
Urban One, Inc.
Washington, DC
You just have to make sure you’re telling
[your] story in a cogent manner and marrying
that with the facts. At the end of the day, it’s
all about the story because that story, it’s your
strategic plan. It’s your vision. It’s how you
weighed the volatility. It’s your guiding post.
Kris is a leader at Urban One, Inc. (UONE), an integrated media company focused on Black
culture in America through its radio, syndications, digital, and cable portfolio. Kris has been with
the company for over a decade, counseling the Nasdaq-traded company on securities law, finance,
acquisitions and dispositions, corporate development, and corporate governance matters. Prior to
his time at Urban One, Kris worked in corporate development and investor relations at E*TRADE
Financial Corporation. Before going in-house, Kris practiced corporate, heath and securities law at
Holland & Knight, LLP.
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Highlights from Panel Discussion
»
»
»
»
»
»
»
Small-cap companies are essential in the public markets as they not only constitute the
majority of public companies in the United States, but also employ many Americans and
cultivate innovation.
Market volatility is a double-edged sword; it can generate higher trading volume that
may help attract more institutional investors, but it can bring challenges in attracting new
employees and managing expectations of existing corporate partners.
An effective board brings expertise that management may not have – access to a level of
expertise that can protect and propel the company moving forward.
Diversity is in the interest of businesses. A diverse board and a diverse workforce help the
business to be more profitable.
When contemplating going public, company leadership must first identify why they are going
public and whether they have the resources to go through the process.
When a company is included in an index, it will help increase the trading volume of
the company’s shares, but on the other hand, it may be more challenging to engage and
communicate with the index fund as your investor.
Scaling and exemptions from certain rules for smaller public companies are essential for
small-cap companies with limited resources.
Participants' Policy Recommendations
Modernize Section 17(b) of the Securities Act to warn against
pump-and-dump schemes by requiring additional disclosure about
paid stock promotion
COMMISSION RESPONSE
Section 17(b) of the Securities Act requires promoters to disclose certain information about their
compensation. Any amendments to Section 17(b) would require Congressional action.
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Consider the impact of the proposed environmental, social, or
governance (ESG) regulations on small and medium-sized companies,
including whether such requirements will discourage companies from
going public
COMMISSION RESPONSE
On March 9, 2022, the Commission proposed rules to enhance and standardize disclosures
regarding cybersecurity risk management, strategy, governance, and cybersecurity incident
reporting by public companies that are subject to the reporting requirements of the Securities
Exchange Act of 1934.34 The release solicits comment on whether the Commission should
exempt certain categories of registrants, such as smaller reporting companies, from proposed
disclosure requirements about a company’s risk management, strategy and governance regarding
cybersecurity risks. As an alternative, the release also solicits comment on whether the Commission
should consider scaled disclosure requirements for smaller reporting companies and certain other
categories of registrants.
On March 21, 2022, the Commission proposed rules to enhance and standardize climate-related
disclosures for investors.35 The proposed amendments include certain disclosure accommodations,
including an exemption from the Scope 3 emissions disclosure requirement for smaller reporting
companies and a longer transition period to comply with the proposed rules for smaller reporting
companies.
The Commission will consider this Forum recommendation in connection with these proposed
rules and any other ESG initiatives.
Modernize regulation of transfer agents in response to technological
and market advancements to increase disclosures made available to
broker-dealers to facilitate liquidity for smaller public companies while
continuing to protect investors
COMMISSION RESPONSE
In 2015, the Commission published an Advance Notice of Proposed Rulemaking and Concept
Release outlining various issues related to the transfer agent regulatory regime and potential
rulemaking to address those issues.36 The Commission will continue to consider the comments
received and this Forum recommendation in connection with this initiative.
REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM | 21
Increase transparency around short selling activities and improve
short sale data
COMMISSION RESPONSE
In connection with short sale disclosure, self-regulatory organizations, including NYSE, Nasdaq,
and FINRA, currently provide short selling information on their websites, and the Commission
currently provides information on failures to deliver securities that may result from sales, including
short sales. On February 25, 2022, the Commission proposed a new rule and related form designed
to provide greater transparency through the publication of short sale-related data to investors and
other market participants.37 Under the rule, institutional investment managers that meet or exceed
a specified reporting threshold would be required to report, on a monthly basis using the proposed
form, specified short position data and short activity data for equity securities. The Commission
will continue to consider the comments received and this Forum recommendation in connection
with this initiative.
Collaborate with NSCC, DTCC, clearing firms, and broker-dealers
to improve the clearing and settlement process for small public
companies
COMMISSION RESPONSE
SEC Staff regularly engage with market participants, including the entities and types of market
participants named here, regarding issues related to the national clearance and settlement system.
The Commission welcomes ideas to improve the clearance and settlement process for small
public companies.
22 | REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM
ADVISORY PLANNING GROUP
The SEC’s Small Business Advocacy team convened an advisory planning group to provide
strategic input on the Forum.38 Planning group members brought additional perspectives to
the Forum planning process, weighing in on improvement opportunities from prior Forums,
emerging issues impacting access to capital, highlighting potential speakers, and promoting the
event within their networks.
Chair
Martha Legg Miller
Director, Office of the Advocate for Small Business Capital Formation
U.S. Securities and Exchange Commission
Government & Regulatory Representatives
Gregory J. Dean, Jr.
Senior Vice President, Office of
Government Affairs
FINRA
Carrie Lee
Senior Advisor, Minority Business
Development Agency
United States Department of Commerce
Bailey DeVries
Associate Administrator
U.S. Small Business Administration
Andrea Seidt
Ohio Securities Commissioner
National Association of State Securities
Administrators
Karl Fooks
Outreach Manager, Office of Domestic Finance
U.S. Department of Treasury
Eric Smith
Director, Office of Innovation and
Entrepreneurship
U.S. Economic Development Administration
Business & Professional Organization Representatives
Katie Allen
Senior Vice President
Center for American Entrepreneurship
Greg Brown
Executive Director
Keenan Institute at UNC Chapel Hill
Faith Bautista
President & Chief Executive Officer
National Asian American Coalition,
National Diversity Council
Charles Crain
Director, Tax & Domestic Economic Policy
National Association of Manufacturers
Shelly Omilâdé Bell
Chief Executive Officer
Black Girl Ventures
Jessica Chin Foo
Pride Economic Impact Index Manager
StartOut
REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM | 23
Patrick Gouhin
Chief Executive Officer
Angel Capital Association
Victor Hwang
Founder and Chief Executive Officer
Right to Start
Samara Mejia Hernandez
Founding Partner
Chingona Ventures
Joseph Kapp
Founder
RuralRISE
Erica Duignan Minnihan
Founding Partner
Reign Ventures
Brett T. Palmer
President
Small Business Investor Alliance
Carlo Passeri
Director, Capital Markets and Financial
Services Policy
Biotechnology Innovation Organization
Andre Perry
Fellow, Metropolitan Policy Program
The Brookings Institution
Maxwell R. Rich
Deputy General Counsel, VP of Regulatory
Affairs, Secretary
Open Deal Inc., dba Republic
Bonnie J. Roe
Chair of the Small Business Issuers
Subcommittee, Business Law, Section’s
Committee on Federal Regulation of Securities
American Bar Association
Rodney Sampson
Executive Chairman & Chief Executive Officer
Opportunity Hub and OHUB Foundation
Charlotte Savercool
Director of Government Affairs
National Venture Capital Association
Jennifer J. Schulp
Director of Financial Regulation Studies, Center
for Monetary and Financial Alternatives
Cato Institute
Keith M. Spears
General Partner
VC Include
Eli Velasquez
Co-founder and Managing Partner
Investors of Color
Evan Williams
Director, Center for Capital Markets
Competitiveness
US Chamber of Commerce
Sevetri Wilson
Founder and Chief Executive Officer
Resilia
24 | REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM
SEC OFFICIALS’ REMARKS
RETHINKING CAPITAL RAISING POLICY: OPENING REMARKS
MARTHA LEGG MILLER
Good afternoon, and welcome to the SEC’s 41st annual Small
Business Forum. This is one of my favorite events of the year, and
not just because it brings together hundreds of people who are
passionate about capital raising, all of our Commissioners, as well
as other government leaders. This annual event signals that no matter
the good work we have done, we will always need advocates pushing
us to rethink and retool our policies in response to a constantly
changing environment.
FISH TANKS VS. VAST OCEANS
If the world were static—like an unchanging fish tank—we could have crafted perfect rules that
could be etched in stone forever. With the right people in the room in 1982 at the first Forum, we
conceivably could have solved all of the capital raising challenges, patted each other on the back,
and moved on.
Yet we live in a dynamic world, less a fish tank than a vast blue ocean. It is a world defined by
continuous change, not homeostasis. Entrepreneurship and investing have dramatically changed
over the past 41 years of the Forum (not to mention the nine decades of the SEC’s existence), and
they will continue to change. Even the best, most thoughtful policies will become outdated with
time, requiring revisiting and refining to meet the needs of a changing world.
THE CHANGING TIDES AT RECENT FORUMS
Let’s take the last three years as an example (which coincidentally line up with the three years
the Forum has taken place since our Office’s conception). In 2019, we met in the middle of the
country in Omaha, Nebraska—where the staple tends to land in the middle of a map of the
United States. One of the key themes of that Forum was highlighting that entrepreneurship exists
everywhere.39 We did what many entrepreneurs were then doing to raise capital: hop on an
airplane and travel across the country. The 2019 Forum occurred in the world of handshakes,
nametags, and crowded auditoriums.
One year later, as we were finalizing plans to take the 2020 Forum to another state, we were
forced to flip our plans upside down in response to COVID-19. It was our first foray into
hosting the Forum on sofas and in home offices across the country. Just a few months into the
pandemic, the Forum conversation shifted to the issues of the day: how the world would adapt
to working remotely, and, even more critical, how the racial justice reckoning of Black Lives
Matter would impact capital raising policy.40
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Last year as we celebrated the 40th Small Business Forum, we were all well-versed with virtual
meetings, albeit with a heavy dose of Zoom fatigue. Instead of talking about when we would
get back to “normal”—the way things had been pre-pandemic—we were talking about how
we would evolve going forward, blending the best of both worlds.41 The 2021 Forum was less
about how to use tools for remote collaboration, and more about how those tools could unlock
trapped potential among entrepreneurs and investors alike.
As we look ahead to this year’s Forum and future gatherings, we know this vast ocean will
continue to change. Your advocacy efforts are essential to refining policy to build the companies
of tomorrow. Whether it be the rise of Web3, new forms of financing, changing investor
expectations, or illumination of social inequities, I have no doubt that the Forum will continue
to be a critical venue to explore the changing tides and how we, as policymakers, should
correspondingly evolve in our thinking.
CALL TO ACTION
For those listening along and thinking: well, Martha is stating the obvious... of course things
have changed since 1982, and of course they will continue to change! You are right, which
makes my call to action to rethink all the more important.
The purpose of the Forum is not to convene a group of people who all think alike and have
the same ideas about how to fix capital raising policy. Instead, the purpose is to convene a group
of people who can share stories, perspectives, and suggestions that will intrigue, spark ideas,
and make you question what you know about capital raising so that you may do rethinking
of your own.
Ironically, this call to action—to rethink—is the most challenging for the smartest person in the
room: the expert, the person with the answers and the impressive résumé. Take my nudge as a
compliment; research shows that the smarter you are, the harder it often is for you to update
your beliefs and viewpoints on the world,42 and hence the more important for you to actively
force yourself to rethink.
I’ll share an example. Many capital markets experts extol that the market is efficient, meaning
if a company is a “good one,” capital will find it. Conversely, if a company struggles to raise
capital, it must be because the company is a “bad one.” Maybe that would be the case in a
contained fishbowl. Yet the data and our Office’s experiences have shown again and again that
who you are—your personal network,
“Many founders never get in the
location, education, and demographic
group—often is the first hurdle to clear
room to tell their story to investors
before investors ever learn what you are
because of who they are. I would
building and, critically, whether they will
43
invest. Many founders never get in the
use the phrase “the door is slammed
room to tell their story to investors because
in their face,” but for most of those
of who they are. I would use the phrase
“the door is slammed in their face,” but for
founders, they never get near the
most of those founders, they never get near
doorway at all.”
the doorway at all. If you haven’t witnessed
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the exclusivity of capital raising, it’s easy to buy into the meritocracy narrative that good money
will find good companies if you don’t pause to rethink. The meritocracy narrative is just not true,
at least not for those who don’t “look the part.”
ON TO THE EXCITING PART: THE MAIN EVENT
As we embark upon the next four days of the Forum with insightful remarks from our
Commissioners and each of our speakers, listen closely when you hear something new,
something that conflicts with your worldview. If you find a puzzle piece that looks out of place,
rather than casting it aside, ponder whether there are others like it, whether the complete puzzle
may be bigger than the picture you’ve had to date. That is the beauty of the Forum: you will
stretch, learn, and grow at the same time you are actively influencing policy.
Thank you for joining us today and across each day of the 41st Small Business Forum. I
am grateful that you care deeply about capital raising and are spending your most valuable
resource—your time—with us.
It takes a talented team to bring this event together, and while biased, I think ours is the best.
Thank you to Jenny Choi, Julie Zelman Davis, Sebastian Gomez Abero, Sarah Kenyon, Jephte
Lanthia, Jenny Riegel, Malika Sullivan, Todd VanLaere, with extra thanks to Amy Reischauer
and Kim Dinwoodie for leading this event.
It has been the greatest gift the past 3+ years serving as the SEC’s inaugural Director of the
Office of the Advocate for Small Business Capital Formation. In this role, I have learned
more from engaging with people who think differently than me than those with whom I have
shared perspectives. To each person who has taken the time to raise your hand, speak up, and
collaborate to advance capital raising policy: thank you. My ask of you is to keep it up, to raise
your hand again (or for the first time!), and to use your voice for good.
Now join me in diving into the main event: the vast blue ocean, which is far more interesting
than a fish tank could ever dream to be.
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CHAIR GARY GENSLER
Thank you, Martha, for that kind introduction. I want to say how
grateful I am for your leadership, particularly as you prepare for your
next chapter in professional life.
As is customary, I would like to note that my views are my own,
and I’m not speaking on behalf of the Commission or SEC staff.
Martha, in the closing days of 2018, you stepped up to the plate to
build and lead the SEC’s Office of the Advocate for Small Business
Capital Formation.44
Since then, the office has represented
the interests of a core part of our
economy: America’s small businesses.
It is fundamental to the SEC’s mission
for businesses of every size—and from
every sector and the full diversity of
our country—to have full access to our
capital markets.
“It is fundamental to the SEC’s mission
for businesses of every size—and from
every sector and the full diversity of
our country—to have full access to
our capital markets.”
From the Office of the Advocate for Small Business Capital Formation to the agency as a
whole, the SEC’s work is to help ensure that when we protect investors, and when we promote
fair, orderly, and efficient markets, we ultimately support the ability for companies of all sizes to
raise money.
This week’s forum will share ideas on the steps we can take to help ensure that small businesses,
from early start-ups to small-cap companies, can grow. When small businesses grow, our
economy grows.
I understand firsthand what happens when small businesses can grow. I am the son and grandson
of small business owners. My two sets of grandparents opened and ran a grocery store and a bar,
both in Baltimore. My dad built a small vending machine business that served hundreds of other
small businesses in the process, such as small diners and bars.
In this sense, my family’s business was part of a larger community of small businesses, whose
owners were as diverse as the city of Baltimore.
Today, the SEC and the Office of the Advocate for Small Business Capital Formation have taken
important measures on behalf of the large and diverse community of small businesses. These
measures have improved full and equal access to our capital markets—whether you work at a
grocery store or one of the startups innovating today.
28 | REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM
I would like to highlight a few of these measures.
First, the office has developed several resources to make it easier for entrepreneurs to navigate the
process to raise capital. One of these is the office’s new Capital Raising Hub, which offers a wealth
of educational resources.45
Second, the office has worked to make the language around raising capital easier to understand,
thanks to their Cutting through the Jargon glossary.46
More broadly, the office has taken strides to represent the interests of all small business investors in
SEC policymaking.
Facilitating capital formation is an integral part of the SEC’s three-part mission.
Facilitating capital formation is bolstered as well by other parts of our three-part mission:
promoting fair, orderly, and efficient markets, along with protecting investors.
Fairness is about expanding opportunity through widening access to our capital markets.
Transparency and competition promote efficiency to in turn promote lower costs for those trying
to raise capital. Through investor protection, we enhance the confidence and trust in markets for
investors, the ultimate source of capital for an entrepreneur with a good idea.
I believe that by promoting these principles, the SEC advances stronger market conditions for
companies of all sizes.
It facilitates capital formation, for example, to have more efficient stock and fixed income
markets that lower the cost of the intermediation in the middle of the market for investors
and issuers.
It facilitates capital formation to bring more transparency and competition to private funds,
where advisers may take in aggregate several hundred billion dollars of fees each year.47 That’s
good for companies on one side—including small businesses hoping to raise funds—and investors
on the other.48
In crafting various rule proposals, I’ve also asked staff to consider how recommendations might
affect smaller reporting companies. For example, in our recent climate disclosure proposal, there
are aspects that apply only to the largest companies—the accelerated filers—and not to smaller
reporting companies, particularly around greenhouse gas emissions. The proposal recognizes
that our rules can impact companies of different sizes in different ways and provides targeted
accommodations for smaller reporting companies, such as by exempting those smaller companies
from disclosing Scope 3 emissions.49 These are emissions from upstream and downstream activities
in a company’s value chain.
REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM | 29
I encourage members of the audience to weigh in on our proposals related to private fund advisers,
climate disclosures, and dozens of other matters. We benefit from comments on every proposal.
Please weigh in, and let us know what you think works and doesn’t work, particularly with an eye
to small businesses. I look forward to reviewing the comment letters that we receive.
Our proposed rules, like the work that Martha and her team do at the Office of the Advocate
for Small Business Capital Formation, are consistent with this agency’s commitment to small
businesses—and they reflect the importance of this year’s Annual Small Business Forum.
I also look forward to the recommendations you will generate from this week’s discussions—on
empowering entrepreneurs, building hometown entrepreneurship, lifting new investor voices,
and navigating the small-capital world. Thank you.
30 | REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM
COMMISSIONER HESTER M. PEIRCE
Thank you, Martha [Miller] for hosting the 41st Annual Small
Business Forum and for inviting such talented and inspirational
individuals to address how entrepreneurs can thrive outside of capital
raising hubs. This issue is near and dear to my heart: for over four
years in my role as Commissioner, I have attempted to shine a light on
the need to make it easier for capital to flow not just to the coasts, but
to the entrepreneurs looking to build businesses in their hometowns
across this great country. I am eager to learn from today’s panelists
lessons drawn from their experiences and suggestions for how we can change the regulatory
environment to allow more people like them to flourish.
I hope that the Commission will pay close attention to not only the panel conversations today and
throughout the week, but also to the policy recommendations resulting from the Small Business
Forum. The Forum is unique among capital formation events. Not only does the public have the
opportunity to provide direct feedback to the Commission, but the Commission is required to
issue a public statement responding to the policy recommendations made by the public.50 Absent
such an explicit directive to consider suggestions for improving the environment for small business
capital formation, the Commission likely would focus on issues more relevant to larger companies.
Heightening the importance of this year’s Forum is the Commission’s current posture of, at best,
indifference, and at times, hostility to facilitating capital formation.51 As it happens, today is the
tenth anniversary of President Obama signing into law the Jumpstart Our Business Startups
(JOBS) Act.52 That bipartisan legislation required the SEC to write rules lessening the burdens on
small companies seeking to raise capital. Some of the Act’s provisions were things we could have
done on our own. Congress and the President got fed up waiting for the Commission to take small
business capital formation seriously.
In line with the Commission’s more general indifference to small business capital formation, the
Commission has responded to policy recommendations made by past Forums in a non-committal
and uninspired way. The Commission’s response to ideas raised last year as potential gamechangers was no different. For example, last year, the Forum recommended “[e]stablish[ing]
a micro-offering exemption with minimal disclosure requirements,” and the Commission
responded by noting that the Commission had already considered and rejected such an idea, but
that the Commission would “continue to consider” the recommendation.53 Worthwhile policy
recommendations to “[r]evise Regulation Crowdfunding to remove the GAAP financial statement
requirement for businesses seeking to raise a small amount” and to “[p]rovide state preemption
for secondary transactions for shares issued under Regulation A and Regulation Crowdfunding”
received similar responses.54
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One area in which we have made recent progress and should build on it relates to the accredited
investor definition. In 2020, when the Commission amended the accredited investor rule to
include certain financial professionals, it also stated that it “may designate [additional] qualifying
professional certifications, designations, and other credentials by order.”55 Along these same lines,
last year’s Forum recommended that the Commission expand the definition “to include other
measures of sophistication, such as specialized industry knowledge or professional credentials,”56
and “include an investor certification course or test whose curriculum has been approved by
FINRA or the SEC.”57 I hope that, taking up the Commission’s invitation, “[m]embers of the
public [will] propose to the Commission” such certifications, designations, and other credentials at
investorcredentials@sec.gov.58
I also hope that the Commission and forum
participants will find inspiration in the success of
the JOBS Act. In all of our work, we should be
inspired to take into account the unique challenges
faced by small businesses in raising capital and the
unique benefits that small businesses offer.
“In all of our work, we should
be inspired to take into account
the unique challenges faced
by small businesses in raising
capital and the unique benefits
Speaking of inspiration, I want to take a moment
that small businesses offer.”
to thank Martha Miller, our first Advocate for
Small Business Capital Formation, who recently
announced her departure. Since December 2018, Martha has worked tirelessly to establish the
Office of the Advocate for Small Business Capital Formation and has assembled a first-class team
that will carry on her great work after she leaves. Martha’s energy, creativity, and can-do attitude
is contagious and her absence will be felt throughout the Commission. Thank you, Martha for
your service.
To the public, enjoy the rest of the forum and please know that my door is always open for
discussions on these and other subjects.59
32 | REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM
COMMISSIONER ALLISON HERREN LEE
Good afternoon, everyone. I’m pleased to join you today for the 41st
Annual Small Business Forum.
A few years ago, I traveled to Omaha to speak at this event, which was
among my first public events as an SEC Commissioner. Martha [Legg
Miller], I think it was also the first year that you and your team had
organized the forum. Now, nearly three years later, this is likely my last
forum as a Commissioner, and I know that you have announced your
intention to depart from the agency as well. So we’ve had parallel trajectories with the forum, and
I want to take this opportunity to thank you for your efforts to ensure that the forum evolves and
remains a vital and important event. I also thank you for your broader service to the Commission.
You will leave the forum, the Office of the Small Business Advocate, and the agency all better off
from your efforts. I wish you the best on the next stage of your journey.
In addition to Martha and her team, I want to thank all of our partners from other regulators and
from private organizations who have come together to plan and participate in this event. Every year
I especially appreciate the collaborative nature of the forum, which emphasizes communication and
collaboration, not only between the Commission and the private sector, but also among regulators. I
think that’s important because it compels us to consider our overlapping jurisdictions and mandates
and better understand how we can collectively create a regulatory environment that supports
diverse, balanced capital raising opportunities for businesses and investors alike.
I also appreciate the continued focus of the forum on opportunities for women- and minority-owned
businesses and underrepresented founders and investors. This is an area of crucial importance as we
seek to promote access and opportunities for all participants in our capital markets.
So as you go about your discussions today and consider potential recommendations for the
Commission, I’d like to highlight a couple of areas where I believe some regulatory action might
be overdue. I know that these topics may have been a particular area of focus yesterday, but I hope
you’ll bear these considerations in mind as you finalize new recommendations for the forum overall.
First, I know you are considering the accredited investor definition. Historically, the forum’s
recommendations have focused on ways to expand this definition, something that we did in fact do
recently. But as you think about your recommended approach to accredited investors, I encourage
you to consider that the wealth thresholds in that definition are about as old as this forum itself,
which is in its 41st year. And while we may consider potential alternatives to wealth as a pathway
to accredited investor status (as we provided for in the 2020 accredited investor rulemaking), I ask
you to think about whether, as long as we do maintain wealth thresholds, it is credible to leave them
static for decades on end. Indeed, some common sense adjustments to the wealth thresholds, such as
indexing to inflation going forward, may help facilitate expanding the definition in other respects.
REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM | 33
Second, I hope you’ll give some thought to Form D. The vast amount of capital being raised
through exempt offerings, especially Reg D offerings, is well documented. But what is less well
documented is exactly how that market is working. Form D is our principal mechanism for
visibility into that market, but in fact our visibility is hampered by the limitations of that form.
I think we could make better, more informed data-driven policy choices with respect to private
markets if we collected better information through, for example, the addition of a simple closing
amendment to Form D.
Lastly, I want to return to a point that
I made back in 2019 that I think is still
relevant and important. And that is that
investors and business owners are not
distinctly separate groups. Many investors
are business owners and vice versa. And
capital raising and investor protection are
not at odds with one another or a zerosum proposition. Rather, investors need
appropriate investment opportunities,
and investor protection increases investor
confidence, which in turn helps promote
capital raising. The relationship between
the two is symbiotic and we can and should
seek to balance the need for both robust
capital raising opportunities and robust
investor protection.
“Investors need appropriate
investment opportunities, and
investor protection increases
investor confidence, which in turn
helps promote capital raising. The
relationship between the two is
symbiotic and we can and should
seek to balance the need for both
robust capital raising opportunities
and robust investor protection.”
Thank you again for your participation in the forum, and I look forward to reviewing your
recommendations.
34 | REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM
COMMISSIONER CAROLINE A. CRENSHAW
Good afternoon and thanks to Martha [Miller], Amy [Reischauer],
Kim [Dinwoodie], all of the staff at the Office of the Advocate
for Small Business Capital Formation, and the participants for
another successful annual forum. It is wonderful to be here and I
do not hesitate to call it a success because having a direct line of
communication with the public is always imperative. I look forward
to the discussion and policy recommendations.
As many of you know, this is the last annual forum for Martha. So I want to give a heartfelt thank
you to Martha for her service as the very first Advocate for Small Business Capital Formation.
She has been a thoughtful and tireless public servant, and has used her position to draw resources
and attention to disparities in the capital markets. In her remarks to kick-off the forum earlier
this week, Martha noted that who you are can be the first hurdle for an entrepreneur before
investors ever learn about what you are building. She pointed to a report produced by the Office
of the Advocate for Small Business Capital Formation that shows demographic background,
personal network, education, and geographic location can be controlling factors in whether or
not an entrepreneur is able to access capital and opportunity. Martha has done a superb job in
standing-up the office and focusing its work on such issues. I look forward to continuing that
work, and to the public’s feedback on how to erode such barriers to access.
ACCESS TO PUBLIC MARKETS
Recently, the Commission put out a proposal relating to Special Purpose Acquisition Companies,
or SPACs, and the issues raised by their structures and characteristics. As SPACs became more
and more popular during the pandemic, several issues came to my attention. I, of course, look
forward to any comment on that proposal, but thinking about SPACs highlighted to me that it
may be time to think holistically about all paths to the public markets. One example of a welldocumented issue in a traditional IPO is the 7% underwriter fee for mid-market entrepreneurs
seeking to access the public markets. Data indicates that entrepreneurs of mid-market companies
are consistently charged 7% by
investment banks for taking their
company public, regardless of other “It may be time to think holistically about
factors and conditions. Further,
all paths to the public markets. I am
IPOs may be underpriced to
produce better first-day returns at a
interested to hear about the challenges
cost to the entrepreneur. This is just
you have faced in your path to the public
an example, and I am interested to
hear about the challenges you have
markets. What are the hurdles that
faced in your path to the public
policymakers and academics are not talking
markets. What are the hurdles that
policymakers and academics are
about? How do we reduce those hurdles
not talking about? How do we
and foster investor protections?”
reduce those hurdles and foster
investor protections?
REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM | 35
DARK POOL TRANSPARENCY
One of the suggestions that arose from last year’s forum was to increase the transparency of short
selling and dark pool activities. In February, the Commission proposed new rules and amendments
to broaden the scope of short sale-related data available to the investing public and to regulators,
and I would encourage anyone interested in that topic to review the proposal. With respect to dark
pools, we proposed several changes to our framework for regulating alternative trading systems,
or ATSs, in January of this year, including strengthening the operational transparency requirements
applicable to certain ATSs, and expanding those requirements to ATSs that trade government
securities. However, I would like to hear from you about whether there is more we should do to
increase transparency in this space. For example, should we extend the operational transparency
requirements to all categories of ATSs, including those that trade equity securities other than NMS
stocks? Should we prohibit certain practices that may create conflicts of interest, such as trading by
the broker-dealer operator and its affiliates in the ATS?
Thank you for your time and I look forward to the policy recommendations.
36 | REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM
PAM GIBBS, OFFICE OF MINORITY AND WOMEN INCLUSION
Thank you, Martha [Miller], so much. When Martha asked me to join
in her Small Business Forum to kick off with opening remarks, I was
delighted to join.
We have worked together over the years, and I have admired her
advocacy for small businesses. She is a true advocate for inclusion,
making sure that businesses such as yourself not only understand the
landscape for raising capital, but also spotlighting and addressing the
specific challenges, including bias, that women and minority entrepreneurs may face.
There’s a lot of symmetry between the role of the Advocate for the Small Business on Capital
Formation and my office, the Office of Minority and Women Inclusion. My office is charged with
promoting diversity and inclusion in the SEC’s workforce, supply chain, and among our regulated
entities, of which we regulate nearly 25,000.
A little bit more about my office. My office was created as a result of the Dodd-Frank Act of 2010
to promote diversity all--within all of the SEC, both in our operations with the specific purpose of
promoting diversity in our workforce, supply chain, and among our regulated entities.
We do that in a number of ways very similar to the Office of the Advocate for Small Business
Capital Formation: outreach and partnerships, information, and educational sessions. Our
mission is to really engage and make sure that we are reaching underrepresented and underserved
communities to make sure, as Chair Gensler has said, that we are as inclusive as we possibly can.
Each year, we report on our efforts
to Congress, and our report for
this year should be posted to SEC.
gov, highlighting our progress. It
has been critically important to
me that we provide access and
opportunity to underrepresented
and underserved communities in all
aspects of the agency’s mission of
protecting investors, because we all
want to invest in retirement. We all
want to own homes. We all want
to plan for a college education. To
presume that only a few are entitled
to this and are investors undercuts
our mission at the SEC.
“It has been critically important to me
that we provide access and opportunity
to underrepresented and underserved
communities in all aspects of the agency’s
mission of protecting investors, because we
all want to invest in retirement. We all want
to own homes. We all want to plan for a
college education. To presume that only a
few are entitled to this and are investors
undercuts our mission at the SEC.”
REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM | 37
I’ve been at the SEC for nearly a decade and in this space of diversity and inclusion for nearly
30 years, and I’m amazed at how far the SEC has come during the past ten years and under the
leadership of Chair Gensler and Martha Miller. We continue to make tremendous strides.
Ten years ago, we presumed all investors were the elite and privileged. We had no strategic plan
for including minority- and women-owned businesses in our regulatory or policy process. Little to
no effort was made to ensure that we were attracting diverse talent to the SEC.
Little to no effort was made to engage underserved and underrepresented communities regarding
investment opportunities and how to protect themselves against scams. No effort was made to
spotlight the issues and challenges surrounding raising capital.
Now, with the creation of offices like the Advocate for the Small Business Capital Formation, the
Office of the Investor Advocate, and my office, the Office of Minority and Women Inclusion, the
agency addresses strategically access and opportunity goals with capital formation, retail investing,
and financial inclusion.
For example, almost every office at the SEC now is intimately involved in advancing diversity
and inclusion. Whether it is to ensure that underserved communities are aware of investor alerts
to avoid scams and Ponzi schemes, to professionals understanding the career paths to entry
and advancement in the financial services industry, to providing transparency and tools for
entrepreneurs such as yourself to raise capital.
The SEC over the past ten years has positioned itself to be front and center to mitigating bias, and
has taken the steps necessary to address these failures. However, I recognize that challenges still
exist. I am frequently asked if I believe that barriers will always exist. Will minorities and women
always have to struggle to get a seat at the table?
While statements like this are very painful to me to hear, particularly as an advocate, I believe
that we are in a transformative period in history. And while the work of my office and the work
of the Office of the Advocate for Small Business will always be needed, the work will become
more elevated.
Today we may focus on entry-level barriers. In the future, we may focus on barriers that require
more attention, rulemaking, policymaking, and are those policies and rules being implemented by
the SEC equitable to all minorities and women in underserved communities.
But I want to encourage you as you participate and encourage you as maneuver in life to be
resilient. You as entrepreneurs are the lifeline to our economic ecosystem, and the ability to raise
capital is the lifeblood for your business, and we want to help.
During the early days of Martha Miller’s tenure at the SEC, I often shared with her that so many
businesses are left with securing capital through their businesses through loans, credit cards, and
family resources. Few of my friends were aware of venture capital or alternative ways for raising
capital, mostly because of lack of education or knowledge in this space. But programs like this that
provide tools for entrepreneurs to navigate the landscape to raising capital is critical.
38 | REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM
As time moves forward and we get more entrepreneurs in the industry through venture capital,
we will chip away at the high percentage of small businesses that use traditional forms of loans, a
whopping 83%, to secure capital. That is my hope, and we are here to help.
However, I want to issue a call to action. I know you guys are ready for your panelists, so I want
to issue you guys a call to action. I want you to unabashedly advocate for what you need from the
SEC to help you raise capital for your business and to be successful.
Push us to continue to address in strategic ways what you need us to do to mitigate biases you
are confronted with. I want you to pay it forward as much as you can. Be the mentor to other
startup--to other startups and entrepreneurs. Help them navigate the landscape of full awareness
that barriers may exist.
I want you to engage the SEC in the regulatory process. Help shape the future landscape for
entrepreneurs. Provide comments to our rulemaking and policymaking initiatives so that they are
more inclusive and that they address the challenges that you are confronted with.
This is--and this does not mean that you have to hire a lawyer to help in this process. Share your
own personal views, relevant, real-life experiences during the comment phase of our rulemaking.
It is so--it is so critical to collective success of promoting diversity and inclusion in the industry.
We must continue to advocate for more diversity and inclusion, but more importantly we need to
move towards finding solutions and implementing policy and rules that are more equitable.
With that, I want to just say that – and Martha has mentioned this – the last two years have been
the hardest for many of us. The pandemic placed on many of us new challenges. But it also created
a gateway for new ventures, collaborations, and partnerships to help promote real change to
address racial and gender inequities. I urge you participating today and this week to leverage those
gateways for paths to success and to seek the SEC out as an ally.
Thank you, and I wish you all a productive week and a successful future. Thank you, you rock.
REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM | 39
RENEE JONES, DIVISION OF CORPORATION FINANCE
Thank you. I’m pleased to join you at this important event. Your focus
today on small cap companies fits well with my remarks, which focus
on the benefits of public securities markets for smaller companies.
To give away the punchline, I believe that public markets offer many
important but underappreciated benefits to companies, particularly
smaller companies – whether those companies conduct registered
offerings or not. Some of the benefits spill over and accrue even to
those smaller non-public companies. Before I begin, I would like to
remind you that the views I express today are my own, and I am not
speaking on behalf of the Commission or the SEC staff.
My remarks are motivated by an important phenomenon: public markets have become a much
smaller part of the capital formation process in recent years. Significant regulatory, legislative and
judicial developments over the past 40 years have led to the dramatic expansion of the exempt
securities markets, both in terms of the amounts raised, and relative to the public registered
markets. Private markets now constitute the majority of capital raising in the United States.
In 2020, registered offerings accounted for $1.8 trillion (or 40 percent) of new capital raised,
compared to the approximately $2.7 trillion (or 60 percent) that the staff estimates was raised
through exempt offerings.
As we debate the appropriate response to the relative decline of public markets, it is important to
consider the benefits that public markets provide to smaller companies. The benefits I will discuss
today apply to companies of all sizes, but in many cases these benefits may be greater for smaller
companies. As the relative importance of public markets declines, so too may many of these
benefits to smaller companies wane.
First, public markets provide transparency that increases
investor confidence and thereby helps smaller companies
raise capital. Public markets provide transparent
market prices that generally reflect all available public
information. Price discovery is enhanced by other
reinforcing features of public markets: active trading,
intermediaries who help investors process information,
and of course, public disclosure.
“Public markets provide
transparency that increases
investor confidence and
thereby helps smaller
companies raise capital.”
Moreover, public market rules ensure that all investors receive information at the same time,
increasing the confidence of investors who may not be closely connected to a company. By
contrast, Regulation FD – an important SEC rule prohibiting selective disclosure – does not apply
in private markets, and restrictions on insider trading are more difficult to police in the private
markets. The upshot is that investors in private companies may have less confidence that they have
full information and are investing on an even playing field.
40 | REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM
Secondly, standardized public market disclosure requirements also enable investors to compare
companies to their peers as well as relevant indexes. This makes the information provided
by each registrant more useful. By contrast, private market disclosures (to the extent they are
available) may require significantly more time and effort to enable comparability. I note here that
comparability provides some benefits even to companies that remain private. To value private
companies, investors need a baseline, and public markets and prices in public markets provide
that baseline. To the extent that public markets decline in relative importance, the quality of the
baseline and its spillover benefits also decline.
Third, public markets also have strong company governance rules that may increase investor
confidence that management is working in their interests. Public companies are subject to SEC
proxy rules that allow shareholders to vote on the selection of board members and to provide
input on other fundamental issues.
In my view, the public market advantages that I just noted accrue disproportionately to highquality smaller companies. On average, investors know less about smaller companies than their
larger counterparts, raising the cost of capital for smaller companies. More information helps
investors price smaller companies more accurately, reducing the cost of capital for small companies
with strong fundamentals. This more efficient capital allocation has many benefits to small firms
and, of course, to the broader economy.
I do not mean to imply of course that there are not barriers or costs to going public. I believe,
however, that these costs are often overstated. This may be especially true for smaller companies,
as Congress and the SEC have provided many accommodations for smaller companies, including
an on-ramp for going public, and scaled disclosure requirements once companies are public.
The Commission continues to build on the scaling of disclosure in its new rule proposals.
For example, our recent rule proposal on climate change disclosures includes a number of
accommodations for smaller companies. We are attentive to the impact of our rules on small
companies as we seek to protect investors, and foster strong and liquid securities markets.
Thank you again for providing me the opportunity to speak with you about this important issue.
I look forward to your continued engagement and I hope that you will comment on our potential
future rule proposals.
REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM | 41
ABOUT THE OFFICE OF THE ADVOCATE
FOR SMALL BUSINESS CAPITAL FORMATION
The SEC’s Small Business Advocacy Office advocates for pragmatic solutions to address challenges faced
by small businesses and their investors raising and deploying capital. “Small business” for the Office
spans from early-stage start-ups raising seed capital, to later-stage private companies whose founders and
investors are seeking liquidity in the public markets, all the way to smaller public companies. Congress
established the Office via the bipartisan SEC Small Business Advocate Act of 2016 as an independent
office within the SEC that reports to the entire Commission as well as to multiple committees of Congress.
Meet the Team
SEBASTIAN
GOMEZ ABERO
JOHN
CAVANAGH
JENNY J.
CHOI
JULIE ZELMAN
DAVIS
KIM
DINWOODIE
COURTNEY
HASELEY
SARAH
KENYON
JEPHTE
LANTHIA
AMY
REISCHAUER
JENNY
RIEGEL
MALIKA
SULLIVAN
TODD
VANLAERE
Send us a message:
smallbusiness@sec.gov
Learn the ropes:
www.sec.gov/
capitalraising
Engage with Us!
Visit us online:
www.sec.gov/oasb
Speak to our team:
202.551.5407
42 | REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM
ENDNOTES
1
The SEC conducts the Forum annually and prepares
this report in accordance with the Small Business
Investment Incentive Act of 1980 [15 U.S.C. 80c-1
(codifying section 503 of Pub. L. No. 96-477, 94
Stat. 2275 (1980))].
2
The SEC responds to the Forum recommendations
pursuant to the Small Business Investment Incentive
Act of 1980, as amended by the Economic Growth,
Regulatory Relief and Consumer Protection Act of
2018. 15 U.S.C. 80c-1. Section 503 of the Economic
Growth, Regulatory Relief and Consumer Protection
Act of 2018 [Pub. L. 115- 174, 132 Stat. 1296
(2018)] amended Section 503 of the Small Business
Investment Incentive Act of 1980 to add this
requirement in new paragraph (e). The responses do
not include any Commission initiatives that are not
yet public. Where a Forum recommendation relates
to an initiative as to which the Commission has
solicited or expects to solicit public comment, the
recommendation will be considered as part of that
initiative, along with other comments received.
3
4
5
Participants voluntarily submitted the presented
information in connection with their registration
online. The report solely includes submitted data,
without inclusion of non-responses.
See Office of Information and Regulatory Affairs,
Office of Management and Budget, U.S. Securities
and Exchange Commission Agency Rule List
(Spring 2022), at https://www.reginfo.gov/public/
do/eAgendaMain?operation=OPERATION_GET_
AGENCY_RULE_LIST¤tPub=true&
agencyCode=&showStage=active&agencyCd=
3235&csrf_ token=DCDA37F9A9B5398E252182
C5B02DCD3AE65AEFF2AF4826C7F6D2240596
47BD8B6B4CE3E745601762BCBB1D7D5CC4E4
20606D.
See Recommendations of the SEC Investor Advisory
Committee Regarding Minority and Underserved
Inclusion in Investment and Financial Services (Mar.
11, 2021), at https://www.sec.gov/spotlight/investoradvisory-committee-2012/20210311-minority-andunderserved-inclusion-recommendation.pdf.
6
See Letter from the SEC Small Business Capital
Formation Advisory Committee to Former
Chairman Clayton (Aug. 26, 2020), at https://
www.sec.gov/spotlight/sbcfac/underrepresentedfounders-recommendation.pdf; see also Letter from
the SEC Small Business Capital Formation Advisory
Committee to Chair Gensler (May 21, 2021), at
https://www.sec.gov/spotlight/sbcfac/encouragingsmall-regional-funds-043021.pdf.
7
Letter from SEC Small Business Capital Formation
Advisory Committee to Chair Gensler (Mar. 12,
2022), at https://www.sec.gov/spotlight/sbcfac/
sbcfac-accredited-investor-recommendation-021022.
pdf.
8
See “Capital Raising Hub” (updated May 5, 2022),
at https://www.sec.gov/education/capitalraising.
9
See “Cutting Through the Jargon” (updated Apr. 28,
2022), at https://www.sec.gov/education/glossary/
cutting-through-the-Jargon.
10
See “Navigate Your Options” (updated Jan.
24, 2022), at https://www.sec.gov/education/
capitalraising/navigator#1.
11
See “Capital Trends Maps” (updated Apr. 28, 2022),
at https://www.sec.gov/education/capitalraising/
trends.
12
See “Building Blocks” (updated May 25, 2022),
at https://www.sec.gov/education/capitalraising/
building-blocks.
13
See “Diversifying Opportunity in Venture Capital”
at https://www.sec.gov/virtualcoffee.
14
See Amending the “Accredited Investor” Definition,
Release Nos. 33-10824; 34-89669 (Aug. 26, 2020),
at https://www.sec.gov/rules/final/2020/33-10824.
pdf.
15
See Order Designating Certain Professional Licenses
as Qualifying Natural Persons for Accredited
Investor Status, Release No. 33-10823 (Aug. 26,
2020), at https://www.sec.gov/rules/other/2020/3310823.pdf.
REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM | 43
16
See supra note 7.
30
See supra note 11.
17
Id.
31
See supra note 12.
18
See Notice of Proposed Exemptive Order
Granting Conditional Exemption from the Broker
Registration Requirements of Section 15(a) of
the Securities Exchange Act of 1934 for Certain
Activities of Finders, Release No. 34-90112
(Oct. 7, 2020), https://www.sec.gov/rules/
exorders/2020/34-90112.pdf.
32
See supra note 13.
33
See https://www.sec.gov/virtualcoffee.
34
See Cybersecurity Risk Management, Strategy,
Governance, and Incident Disclosure, Release Nos.
33-11038; 34-94382 (Mar. 9, 2022), at https://www.
sec.gov/rules/proposed/2022/33-11038.pdf.
19
See Facilitating Capital Formation and Expanding
Investment Opportunities by Improving Access to
Capital in Private Markets, Release No. 33-10884;
34-90300; IC-34082 (Nov. 2, 2020), at https://www.
sec.gov/rules/final/2020/33-10884.pdf.
35
See The Enhancement and Standardization of
Climate-Related Disclosures for Investors, Release
Nos. 33-11042; 34-94478 (Mar. 21, 2022), at
https://www.sec.gov/rules/proposed/2022/33-11042.
pdf.
20
See SEC Small Business Capital Formation Advisory
Committee Meeting to explore small business
investment issues (Feb. 10, 2022), agenda available
at https://www.sec.gov/sbcfac-agenda-021022; see
also supra note 7.
36
See Transfer Agent Regulations, Release No.
34-76743 (Dec. 22, 2015), at https://www.sec.gov/
rules/concept/2015/34-76743.pdf.
37
See Short Position and Short Activity Reporting by
Institutional Investment Managers, Release No.
34-94313 (Feb. 25, 2022), at https://www.sec.gov/
rules/proposed/2022/34-94313.pdf.
38
The SEC’s Small Business Advocacy team convenes
the advisory planning group to participate in Forum
planning pursuant to 15 U.S.C. 80c-1(b).
39
See Report on the SEC’s 38th Annual Small Business
Forum (2019), available at https://www.sec.gov/files/
small-business-forum-report-2019.pdf.
40
See Report on the SEC’s 39th Annual Small Business
Forum (2020), available at https://www.sec.gov/
files/2020-oasb-forum-report-final_0.pdf.
41
See Report on the SEC’s 40th Annual Small
Business Forum (2021), available at https://www.
sec.gov/files/2021_OASB_Annual_Forum_Report_
FINAL_508.pdf.
42
See Adam Grant, Think Again: The Power of
Knowing What You Don’t Know, Viking (2021).
43
See, e.g., SEC Office of the Advocate for Small
Business Capital Formation, “Annual Report
for Fiscal Year 2021” (2021) at 21 (“Challenges
with networks and connections impact ½ of
entrepreneurs with newer businesses, compared
to entrepreneurs with mature businesses.”), 25
(“Both individual angels and angel groups tend
to focus on their local communities. The distance
between lead investors and the target company
averages only 37 miles.”).
21
See SEC Small Business Capital Formation
Advisory Committee Meeting to explore increasing
opportunities for underrepresented founders
and investors (Apr. 30, 2021), agenda available
at https://www.sec.gov/spotlight/sbcfac/sbcfacagenda-043021.htm; see also Letter from the
SEC Small Business Capital Formation Advisory
Committee to Chair Gensler (May 21, 2021), at
https://www.sec.gov/spotlight/sbcfac/encouragingsmall-regional-funds-043021.pdf.
22
See supra note 8.
23
See supra note 6.
24
See supra note 5.
25
See Office of the Investor Advocate Report on
Activities Fiscal Year 2021, at https://www.sec.gov/
files/FY21_OIAD_SAR_ACTIVITIES_REPORT_
FINAL_508.pdf.
26
See Asset Management Advisory Committee
Spotlight page, at https://www.sec.gov/page/assetmanagement-advisory-committee.
27
See Asset Management Advisory Committee Final
Report and Recommendations for Small Advisers
and Funds (Nov. 3, 2021), at https://www.sec.gov/
files/final-recommendations-amac-sec-small-advisersand-funds-110321.pdf.
28
See supra note 8.
29
See supra note 9.
44 | REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM
44
See Securities and Exchange Commission, “Martha
Legg Miller, Director of Small Business Advocate
Office, to Leave SEC” (March 24, 2022), available
at https://www.sec.gov/news/press-release/2022-48.
45
See supra note 8.
46
See Securities and Exchange Commission, “Cutting
through the Jargon” (April 1, 2022), available at
https://www.sec.gov/cutting-through-the-Jargon.
47
See Securities and Exchange Commission, “Prepared
Remarks at the Institutional Limited Partners
Association Summit” (Nov. 10, 2021), available
at https://www.sec.gov/news/speech/genslerilpa-20211110.
48
See Securities and Exchange Commission,
“Statement on Private Fund Advisers Proposal”
(Feb. 9, 2022), available at https://www.sec.gov/
news/statement/gensler-statement-private-fundadvisers-proposal-020922.
49
See Securities and Exchange Commission,
“Statement on Proposed Mandatory Climate Risk
Disclosures” (March 21, 2022), available at https://
www.sec.gov/news/statement/gensler-climatedisclosure-20220321.
50
See 15 U.S.C. § 80c-1(e)(2), available at http://
uscode.house.gov/view.xhtml?req=(title:15%20
section:80c-1%20edition:prelim) (“The
Commission shall-. . . promptly issue a public
statement [each time the forum submits a finding
or recommendation]”).
51
See Commissioner Hester Peirce and Commissioner
Elad L. Roisman, Falling Further Back - Statement
on Chair Gensler’s Regulatory Agenda (Dec.
13, 2021), available at https://www.sec.gov/
news/statement/peirce-roisman-falling-furtherback-121321 (“The Regulatory Flexibility Agenda
[] neglects to include a single item designed to help
companies raise capital. Indeed, several items listed
are poised to do the exact opposite.”).
52
Jumpstart Our Business Startups Act, Pub. L. No.
112-106, 126 Stat. 310, 401 (2012), available at
https://www.congress.gov/112/plaws/publ106/
PLAW-112publ106.pdf.
53
Sec’s & Exch. Comm’n, Final Report of the 2021
SEC Government-Business Forum on Small Business
Capital Formation 11 (2021), available at https://
www.sec.gov/files/2021_OASB_Annual_Forum_
Report_FINAL_508.pdf (“2021 Forum Report”).
54
Id. at 12.
55
Accredited Investor Definition, Exchange Act
Release Nos. 33-10824; 34-89669; File No.
S7-25-19, available at https://www.sec.gov/rules/
final/2020/33-10824.pdf.
56
See supra note 53 at 15.
57
Id. at 16.
58
Id. at 15.
59
I can be reached at CommissionerPeirce@sec.gov.
REPORT OF THE 41ST ANNUAL SEC SMALL BUSINESS FORUM | 45
U. S . S E C U R I T I E S A N D E XC H A N G E CO M M I SS I O N
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