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Remarks at Special Meeting of the SEC Small Business Capital Formation Advisory Committee

April 2, 2020

Thank you Carla [Garrett] for calling this ad hoc committee meeting today.  COVID-19 has up-ended everything about our lives in the last month.  The temporary shutdown of the economy is particularly difficult for many small businesses, which are being forced to shut their doors, let employees go, and perhaps even completely cease operations.  Cooperation, creativity, and flexibility can help us get through the current crisis and the transition back to normal economic activity.  I am pleased that we are beginning that process today by hearing directly from the committee on their ideas of how the Commission can help small businesses address their short-term capital needs to maintain their long-term viability. 

Bold action will be necessary so, in brainstorming solutions, we ought not to tether ourselves to our existing framework.  For example, I have previously advocated for a micro-offering exemption for entrepreneurs to raise small amounts of capital from the people that know them best.  Could a micro-offering exemption assist the hundreds of thousands of restaurants and other local businesses that, while beloved by their communities, are not currently allowed to operate?  Would getting such an exemption up and running on a pilot basis make sense at a time like this?

Last month the Commission proposed a number of amendments designed to harmonize, simplify, and improve the framework for private offerings.[1]  In light of the current environment, do those proposals go far enough to make exemptions such as Regulation A and Regulation Crowdfunding attractive to small businesses?  Could we make temporary adjustments to these regulations to make them more useful in meeting pressing needs that cannot wait for the full rulemaking process to happen?  Allowing businesses and investors to engage in capital-raising over the internet is just another way of practicing social distancing, so crowdfunding may have a bigger set of potential users now than it did two months ago. 

We should think not only in terms of preserving existing businesses, but also about fostering entrepreneurial tendencies during a time when other opportunities are dwindling.  As the ranks of unemployed swell and the prospects for working outside the home shrink, people may turn their time and talents toward building small businesses.  I just heard, for example, about an Uber driver who is replacing his lost income by producing handcrafted masks. 

In the midst of so much uncertainty, this Committee’s work has only become more relevant.  I am eager to hear the Committee’s thoughts and observations today.  For the members of the public that are listening or watching online, to the extent you have ideas that you would like to share, I urge you to reach out to me, my fellow Commissioners, and Martha Miller’s office.   Thank you. 

[1] Press Release, SEC Proposes Rule Changes to Harmonize, Simplify and Improve the Exempt Offering Framework, available at

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