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Remarks Before the Small Business Capital Formation Advisory Committee

Washington D.C.

Oct. 13, 2022

Good morning, everyone. My thanks to Carla and the members of the Small Business Capital Formation Advisory Committee. As is customary, I’d like to note that my views are my own, and I am not speaking on behalf of the Commission or SEC staff.

I would like to start by thanking Ohio Securities Commissioner Andrea Seidt, who recently concluded her service with the Committee. Andrea represented the North American Securities Administrators Association (NASAA), and I understand that NASAA has selected as their new Committee representative William (Bill) Beatty. Bill serves as the Director of the Securities Division for the Washington State Department of Financial Institutions. Welcome, Bill.

Your agenda today includes two discussions, one on entrepreneurial ecosystems and the other on the market for Initial Public Offerings. I look forward to following the readouts from both.

Entrepreneurs and small businesses are the foundation of so much that happens in our economy. Over the last 25 years, small businesses have created two out of every three new jobs.[1] They account for a substantial amount of goods, services, and innovation. Even though public companies listed on the stock market get a lot of attention in the daily news cycle, more than 99 percent of U.S. businesses are small businesses. Their employees make up nearly half of the American workforce.[2]

I think about Commission Uyeda’s grandfather, who ran a produce route. I think about Commissioner Lizárraga’s parents, who ran a Mexican-food business. I think about how Mark and Jaime helped their families with the work as they grew up. I think about how these two family businesses based in southern California led—just one or two generations later—to two Commissioners seated with us today in Washington, DC. I think about my father, Sam Gensler, and his vending machine business.

Small businesses and entrepreneurs have a seat at the table for our work at the Commission. That’s not only because a number of us on the Commission grew up in families with “the family business.” It’s also because our capital markets are relevant to those small businesses as well. Our capital markets affect those small businesses and entrepreneurs when they borrow money. The capital markets affect small businesses and entrepreneurs even when they’re borrowing from a bank. Those banks may be borrowing from the capital markets as well. Those loans could be securitized. Our capital markets also affect small businesses that might be considering whether to seek funding from private funds whose advisers are registered with us, as well as small businesses that one day may go public.

As you look at our entrepreneurial ecosystems, please let us know what you believe the Commission can do to enhance those ecosystems. We have a three-part mission: to protect investors, facilitate capital formation, and maintain fair, orderly, and efficient markets. How can we continue to deliver upon that mission for the millions of Americans whose lives are shaped by entrepreneurship?

As relates to your second discussion on IPOs, naturally, the number of IPOs ebbs and flows over the course of different economic and market cycles. We are living in one of those transitional times right now, shaped by economic uncertainty relating to the war in Ukraine, the pandemic, and central banks shifting from an accommodating to a tightening policy stance. What I am most interested in is the advice you might have for the long-term regarding traditional IPOs, Special Purpose Acquisition Companies (SPACs), and direct listings.

We have a proposal outstanding on SPACs, and I appreciate the Committee’s prior comments and recommendations with regards to the proposal. We will consider these as well as all other public comments on the proposal. It also would be helpful to hear any further thoughts you may have on all areas regarding the IPO market as relates to small businesses and entrepreneurs.

I thank you and hope you have a productive discussion.

[1] See Daniel Wilmoth and U.S. Small Business Administration, “Small Business Facts: Small Business Job Creation” (April 26, 2022), available at

[2] See U.S. Small Business Administration, “2022 Small Business Profile” (Aug. 31, 2022), available at

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