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19th Amendment Lessons for 2019’s Advocates: Remarks to the National Association of Women Business Owners

Washington D.C.

June 4, 2019

Good morning, women advocates! It is a pleasure to join you on your Advocacy Day in Washington, DC. Knowing that time is the greatest resource a business owner has, I thank you for committing your time today to championing the needs of the over 10 million women-owned businesses in the U.S. that you represent. [1] I look forward to hearing from you on how the U.S. Securities and Exchange Commission can work to address issues that you face in accessing capital. I should note that the views I express today represent my own and not necessarily those of the Commission or staff, a standard disclaimer you may hear from many you meet with in DC.[2]

Today is a big day for the number 19 and advocacy. On this day in 1919—100 years ago—Congress passed the 19th Amendment guaranteeing women the right to vote.[3] The 19th Amendment was the culmination of decades of advocacy for women's suffrage on both the state and national levels. We meet in 2019, where you are here to advocate for women-owned businesses and are equipped with the right to vote on the issues about which you speak today. And I stand here before you leading the SEC's new Office of the Advocate for Small Business Capital Formation[4] that began operations earlier this year in 2019. 19 sounds like a lucky number for advocacy.

As you likely recall from your American history classes, while the 19th Amendment passed in 1919, women's right to vote was a half a century of advocacy in the making. As the SEC's first Advocate for Small Business Capital Formation, I am often asked to define what "advocacy" means, and not just as a trick interview question. At the risk of sounding like Mr. Portokalos, the father in the movie My Big Fat Greek Wedding, I want to trace the word "advocate" back to its roots (although I'm sure he would claim the roots are Greek, not Latin).[5] The word comes from the Medieval Latin word "vocare," meaning to "call."[6] From vocare came the word "advocatus," or one called to aid another, forming the root of the Old French word "advocat," which has since evolved into the term used for the profession of barristers, advocates, and lawyers who represent the needs of others.[7] At its core, "advocacy" is about being called to use your voice for others.

On the 100th anniversary of the 19th Amendment, I am struck by the power of using your voice and influence to impact change. Susan B. Anthony, one of the most famous suffragettes, knew well how to use her voice, even when it wasn't being heard at the ballot box. During the winter of 1872, Anthony found herself stranded by a snowstorm in train with a U.S. Senator and his wife (neither of whom were apparently champions of the women's suffrage movement at the time).[8] Seizing the opportunity to develop a new relationship and share her message, Anthony became close personal friends with him thanks to a shared snacks and a longer-than-expected train ride. Six years after the train ride, that same Senator proposed for the first time the amendment that was adopted as the 19th Amendment almost forty years later. Susan B. Anthony, like each of you here, knew the power of advocacy: being called to use your voice. She also knew the power of finding amplifiers of her message—in this case a Senator—who could increase the volume of her voice before the audience she needed.

I tell that story to draw a parallel between the ways we can work together in 2019. You are here in DC to do exactly what NAWBO's founding president instructed: "Get a seat at the table or build your own table."[9] Ladies, you have a new seat at the SEC's table with our Office. Our Office is proactively identifying unique challenges to women-owned businesses in raising capital both as part of our mission and Congressional mandate.

Each of you has attended plenty of conferences, listened to enough speeches, and read countless articles showing that women-owned businesses bootstrap their financing and face challenges with accessing capital. Today I won't dwell on the statistics that depict the struggles women face, because each one of you is the bright spot in the statistics that show that women-owned businesses are thriving. I'd rather celebrate that women start an average of 1,821 new businesses per day in the U.S. and make up 40% of entrepreneurs.[10] I am personally proud that the women in my family have contributed to those statistics.

You each bring valuable perspective to DC that our lawmakers and regulators need to hear. At the SEC, Chairman Clayton has outlined an ambitious rulemaking agenda to tackle a number of issues that small businesses and their investors have asked us to address.[11] Our other Commissioners have also each expressed keen interest in the regulatory dynamics impacting small businesses.[12] In the first four months of our Office, we have met with many small businesses and their investors, and we want to hear from more of you. Some of the top issues raised to us by female entrepreneurs in particular include:

  1. General Solicitation and Crowdfunding — Anecdotal evidence, as well as some studies[13], have indicated that many women find more success using crowdfunding and offerings that use general solicitation to tap broader networks of potential investors. In other words: harnessing the power of the Internet. We have heard that the current framework is not working optimally from the perspective of some companies and platforms.[14] How can we make it work better?
  2. Accredited Investor Standard — Some businesses and investors have flagged how the accredited investor standard disparately impacts access to capital depending upon the breadth of your network of high net worth individuals and your geographic location.[15] Talk to us about how we can balance access to funders with investor protection.
  3. Finders — Identifying potential investors is one of the most difficult challenges for small businesses trying to raise capital. Companies often find it hard to determine under what circumstances they can engage a "finder" that is not registered as a broker-dealer. Of the various proposals for a finders framework, which one makes the most sense to you? Share with us data to demonstrate the market need.
  4. New Fund Formation — New investment funds are emerging focused on specific demographics, from women founders to minority founders to targeted geographic footprints. We have met with funders who are interested in seeding capital, yet encounter challenges navigating the complexities of fund formation.[16] What specific rules constrain the creation of new funds that would invest in your companies?
  5. Educational Tools — Navigating the securities laws can be complex, and often costly, for small businesses. We want to build upon the resources available to small businesses to allow you to better locate the answers you need, without Shakespearian lawyerisms. Share with us where we can simplify and clarify.

We also look forward to receiving comments and feedback from you in response to the SEC's planned concept release on ways to harmonize the various private placement exemptions.[17]

In conclusion, together we can be advocates to improve the capital formation landscape for all businesses, including those owned by women. I want to hear your perspectives, to amplify your voices here in DC, and to help you tell your stories. Today I implore you to channel your inner Susan B. Anthony and identify those with whom your message resonates, including with our Office at the SEC.

You have a voice. You came here to advocate. I hope you will use that voice and speak up on capital formation. We're listening.


[1] See National Association of Women Business Owners, "About NAWBO, Our Vision and Mission," https://www.nawbo.org/about/about-nawbo-our-vision-and-mission.

[2] The Securities and Exchange Commission disclaims responsibility for any private publication or statement by any of its employees. This speech expresses the author's views and does not necessarily reflect those of the Commission, the Commissioners, or other members of the staff.

[3] For further history on the 19th Amendment, see National Archives, "The 19th Amendment" (updated May 16, 2019), https://www.archives.gov/exhibits/featured-documents/amendment-19.

[5] Mr. Portokalos memorably claims to be able to show that the origins of any word are Greek. See https://www.youtube.com/watch?v=VL9whwwTK6I.

[6] "Vocare" also serves as the root of many derivative words for callings, from vocation to vocabulary to vocalize.

[8] See Rebecca Mead, How the Vote Was Won: Woman Suffrage in the Western United States 1868-1914, New York University Press (2004), at 38.

[9] Quoting founding president of NAWBO Susan Hagar; see https://www.nawbo.org/about/history-timeline.

[10] Based upon 2017 and 2018 figures published in "The 2018 State of Women-Owned Businesses Report" sponsored by American Express, using data from the U.S. Census Bureau, https://about.americanexpress.com/files/doc_library/file/2018-state-of-women-owned-businesses-report.pdf. The study also noted that the number of women-owned businesses has increased by 3,000% since 1972, and that firms owned by minority women have grown by 3x that of all women-owned firms over the past 11 years.

[11] See Chairman Jay Clayton, "Remarks on Capital Formation at the Nashville 36|86 Entrepreneurship Festival" (August 29, 2018), https://www.sec.gov/news/speech/speech-clayton-082918.

[12] See, e.g., Commissioner Robert Jackson, "The Middle-Market IPO Tax" (April 25, 2018), https://www.sec.gov/news/speech/jackson-middle-market-ipo-tax; Commissioner Hester Peirce, "Tossing Fish and Catching Capital: Remarks at the 38th Annual Northwest Securities Institute CLE at the Washington State Bar Association" (May 4, 2018), https://www.sec.gov/news/speech/speech-peirce-050418; Commissioner Elad Roisman, "Remarks at SEC Speaks: Encouraging Smaller Entrants to Our Capital Markets" (April 8, 2019), https://www.sec.gov/news/speech/speech-roisman-040819.

[13] See, e.g., National Women's Business Council, "Understanding the Landscape: Access to Markets for Women Entrepreneurs" (May 10, 2018), https://s3.amazonaws.com/nwbc-prod.sba.fun/wp-content/uploads/2018/05/09204841/20180510-NWBC_Access-to-Markets_FINAL.pdf.

[14] See, e.g., SEC Office of the Advocate for Small Business Capital Formation Roundtable, "Capital Formation between the Coasts" (May 6, 2019), webcast archive https://www.sec.gov/video/webcast-archive-player.shtml?document_id=sbround050619.

[15] See id.

[16] As it relates to public fund formation, Director of the Division of Investment Management Dalia Blass announced a new outreach initiative targeting small and mid-sized fund sponsors to address regulatory barriers. See Director Dalia Blass, "Keynote Address: ICI Mutual Funds and Investment Management Conference" (March 18, 2019), https://www.sec.gov/news/speech/speech-blass-031819.

[17] For further details on the proposed harmonization concept release, see remarks from Director of the Division of Corporation Finance Bill Hinman at the inaugural meeting of the SEC Small Business Capital Formation Advisory Committee (May 6, 2019), https://www.sec.gov/info/smallbus/acsec/sbcfac-transcript-050619.pdf.

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