Remarks at the 2012 SEC Government-Business Forum on Small Business Capital Formation
Commissioner Troy A. Paredes
U.S. Securities and Exchange Commission
Nov. 15, 2012
A special “thank you” is due to Gerald Laporte and everyone else at the SEC who had a hand in organizing this terrific event. I also want to thank our distinguished panelists. The success of this gathering depends on your willingness to explore with the Commission what it takes for entrepreneurs and small companies to access the funding they need to start up and grow.
Let me begin with the bottom line: Now more than ever we need to take concrete steps to promote small business.* Particularly with the present state of our economy, small business capital formation must become a leading priority of the SEC. We need to promote small business because startups and growth companies create jobs and foster the opportunities that allow individuals to achieve their goals and aspirations. We all benefit when the economy is doing well and when individuals are able to fulfill their ambitions.
We also all benefit when emerging enterprises innovate and spawn new technologies. Technological advances increase our standard of living by empowering us to work more productively; transact more efficiently; access information and knowledge like never before; and communicate with each other in previously unimaginable ways. As if this were not enough to justify promoting small business, there are the breakthroughs that lead to new treatments for devastating illness and disease.
All of this — including the chance to back startups and other dynamic small businesses — also serves the interests of investors by affording them a wider array of investment options for putting their money to work.
However, we cannot just assume that good ideas will bear fruit on their own. For small business to thrive, more is needed than an entrepreneur’s ingenuity, hard work, and determination. To prosper, small business needs capital.
It is, of course, a positive sign that discussions continue to center on how best to promote small business. But, as I said at last year’s forum, we cannot just talk about promoting small business; we need action. Not surprisingly, I am encouraged by the JOBs Act. The JOBs Act — given its goal of spurring economic growth and job creation by making it easier for businesses to find funding — is a significant step in the right direction.
The SEC also needs to take significant strides to promote small business. The Commission needs to move forward with a small business agenda that stresses small business capital formation as one of the agency’s key priorities.
Year in and year out this annual forum has resulted in specific recommendations for facilitating small business capital formation, and I have every reason to expect that the recommendations coming out of this 2012 Forum will warrant our serious consideration.
In addition, I look forward to continuing to consider input from the SEC Advisory Committee on Small and Emerging Companies and its suggestions for promoting small business.
Furthermore, a meaningful retrospective review of the Commission’s rules could reveal still more opportunities for regulatory change that makes a tangible difference for small business by opening up lower-cost pathways to capital. We need to be willing to reduce for small business existing regulatory burdens that create barriers to entry and that unduly hinder new and smaller companies when they try to get the funding they need to invest, hire, and compete.
Even as new ideas are advanced for promoting small business, proceeding with our current rulemaking obligations under the JOBs Act should be at the top of any small business agenda. Entrepreneurs stand ready to get their enterprises off the ground and growing with the benefit of crowdfunding, and businesses await the opportunity to raise capital more efficiently once the ban on general solicitation under Rule 506 is lifted.
Thank you again joining us and for helping us consider how we can best fulfill the SEC’s mission, a fundamental feature of which is to facilitate capital formation.
* The views I express here today are my own and do not necessarily reflect those of the Securities and Exchange Commission or my fellow Commissioners.