Bolstering Capital Formation: The Third Leg of the SEC's Mission

The SEC Speaks in 2019, Washington D.C.


Thank you for the invitation to join you today during SEC Speaks. This is likely the first time many of you are hearing from our Office, which has been in operation for just over two months (68 days to be exact). I look forward to introducing you to the plans for the new Office of the Advocate for Small Business Capital Formation, including previewing our Office’s new business plan, which we are publishing today.[1]

As the newly-appointed Small Business Advocate, I have been charged with operationalizing a new office created by Congress.[2] Put simply, I was brought to the SEC to run a start-up within the government. Our early successes, which I will highlight today, would not be possible without the broad support of each of the Commissioners, as well as the divisions and offices within the SEC, each of whom have embraced us as a new champion of small business within our agency. As Chairman Clayton mentioned in his opening remarks, our Office builds upon the momentum from a renewed focus on capital formation within the SEC. In establishing a new office, I am particularly grateful to have brought on board immense talent and passion in our office’s first two team members, Julie Davis and Emerald (Greywoode) Boston-Mammah, who are in the audience today.

Before delving into specifics about our Office, I want to remind the audience, as many of our speakers have today, that the views I express are my own and do not necessarily reflect those of the Commission, the Commissioners or Commission staff.[3]

Focus on the Third Leg of the SEC’s Mission: Capital Formation

The SEC’s tripartite mission of (1) protecting investors, (2) maintaining fair, orderly and efficient markets, and (3) facilitating capital formation is often recited, including in presentations at this conference. That mission is analogous to a three-legged stool: lop off or weaken one leg, and you’ll find yourself on the floor with a broken seat. Our office bolsters the third leg of that stool by advocating for solutions that facilitate better capital formation for small businesses and their investors. By facilitating capital formation and the generation of new companies, investors realize expanded opportunities to invest and create wealth, and markets benefit from diverse companies. To continue the metaphor: it is the presence of all three legs working together that provide balance and stability to the stool, and the same is true of our regulatory system.

Recognizing the critical role small businesses play in our economy,[4] Congress charged our Office with a number of objectives, including:

  • Assisting small businesses and their investors in resolving significant problems they may have with the SEC or with self-regulatory organizations (SRO);
  • Identifying areas in which small businesses and their investors would benefit from changes in SEC regulations or SRO rules;
  • Identifying problems that small businesses have with securing access to capital;
  • Analyzing the potential impact on small businesses and their investors of proposed SEC regulations and SRO rules;
  • Conducting outreach to small businesses and their investors to solicit views on capital formation issues;
  • Proposing appropriate regulatory and legislative changes to the SEC and Congress to mitigate problems identified with small business capital formation and to promote the interests of small businesses and their investors; and
  • Proactively identifying unique challenges faced by minority-owned small businesses, women-owned small businesses, and small businesses affected by natural disasters.

A Transparent Business Plan

In operationalizing the Office and delivering upon the aforementioned objectives, I started with the most logical place I knew coming from private practice: by analogy to how businesses approach startup activity. We have created a foundational business plan for 2019 that looks strikingly similar to most small business plans. The original draft actually started in a free online template that many businesses you support likely used. Our business plan will serve as a compass to guide decisions internally, as a pacesetter to keep us on track, and as a roadmap to guide expectations externally. Because of the premium we place on transparency, we have put the business plan on our website so that we are open about our thought process and plan of action.

Today I wanted to share with you two key pieces of the plan that I think you will find particularly interesting.

First is our target market segmentation approach. We are charged with supporting the spectrum of small businesses from emerging, privately-held companies to publicly-traded companies with less than $250 million in public market capitalization.[5] Our office recognizes the diverse needs of these small businesses across their business cycle and that one size does not fit all. We are developing strategies to reach different segments of small businesses and their investors, from the nascent companies seeking angel and seed funding, to the mature and later-stage companies seeking their follow-on rounds, to the small reporting companies accessing public markets. Businesses know they must accurately define and target their markets’ needs, and we are taking the same approach.

Second is our plan for launching the products, programs and services from our Office over the course of 2019. We have mapped out on a calendar quarter-by-quarter basis what offerings we plan to launch. We started with our minimum viable product, or MVP, that we need to provide to fulfill our legislative mandate. Namely, that includes:

  • Small Business Capital Formation Advisory Committee constitution
  • Constituent relationship management (CRM) system development to track metrics and provide accountability
  • Government-Business Forum on Small Business Capital Formation coordination
  • Annual report to Congress analyzing our activities and communicating our policy recommendations

From our MVP, we fleshed out what our full scale programming would entail, including:

  • Direct outreach to small businesses and their investors, including through roundtables and events around the country
  • Policy analysis and evaluation
  • Issue resolution with small businesses or their investors and the SEC and SROs
  • Inter-agency small business collaboration
  • Educational resource development for small businesses and their investors

Efficient Government

Only after deciding on the aforementioned deliverables for 2019 did we start mapping what resources we would need to accomplish our mission. Like a scrappy start-up figuring out how to do more with less, we built a plan of action around lean and efficient scaling of operations. That’s exactly how small businesses run: efficiently focusing resources to maximize impact.

On day 68 of operations, I am proud that progress is well under way towards constituting the Commission’s Advisory Committee, and that we have started building our CRM, have plans in place for the annual forum, are conducting outreach across the country, and are actively working on policy analyses with current rulemakings. It is often said that “busy is the enemy of productive,” and I am proud that we haven’t just been busy, we’ve been highly productive in the first two months of operations.

Pragmatism Grounded in Market Feedback

Our business plan for 2019 sets forth a pragmatic approach to deliver on Congress’s charge. You will hear me use the word “pragmatism” often, and it is one of the core values of our Office. Specifically, it means approaching problems with a solution-oriented mindset and making practical recommendations for meaningful policy advancement.

Fundamental to pragmatism is grounding our recommendations in quality data so that regulators and lawmakers can make smart, informed decisions. To do that requires good feedback from marketplace participants—our small businesses and their funders—on what works well and what we need to fix to make it work better. Good feedback, in turn, requires us to not only be receptive, but to be accessible to a broad spectrum of small businesses and their investors.

Accessibility Outside of D.C.

Our Office stands ready to advocate for small businesses navigating the securities laws, and we want to make sure that our message reaches everyone. Our team is engaged in outreach efforts to let people know that we are open for business and that we want to collaborate with you on solutions to the issues small businesses are facing. Through our outreach, we are able to offer the small business community an amplifier for the regulatory issues they face to be better heard in DC. We are fostering accessibility by engaging with the small business community across a variety of channels, geographic regions, and marketplace participants. If the address 100 F Street Northeast does not mean something to you, that’s ok! (Although I expect that for the group who self-selected into today’s event, you are quite familiar with how to find us.) We want to make ourselves relevant outside of D.C., especially to those who may not know their way around the SEC.

In March we visited Kansas and Missouri, where we met with entrepreneurs through multiple events, including a town hall, panel participation, site visits and speaking engagements. In May we will visit Colorado, and we plan to visit more areas of the country to engage in candid discussions about the challenges faced in small business capital formation. In August we are thrilled to be hosting the 38th annual Government-Business Forum on Small Business Capital Formation in Omaha, Nebraska, which we hope you will attend. And of course when you’re in D.C., we welcome you to pay us a visit on F Street anytime.

Through two days spent in the Midwest with businesses of varying sizes and funding, I was reminded of exactly why I find myself drawn to small business leaders: they are doers—the people who convert aspirations into action, and who channel their ideas into creation. Among my most vivid memories from Kansas City was an entrepreneur at our town hall event who had started a business as a new career in her 50s. She raised her hand and asked me to bring the message back to D.C., in her words, that we cannot forget about the senior entrepreneurs who would rather build a new company when they retire than sit on a front porch. Her words reminded the crowd that entrepreneurship is not confined to one region, one industry, or one demographic, but that it is pervasive across the country. As mostly attorneys in the crowd, each of you can relate to the infectious enthusiasm when a client calls you with an issue that they do not view as a problem holding them back, but an opportunity where you can help them move forward, just like our Kansas City business owner. I am thrilled that the SEC now has an office dedicated to moving small businesses forward through capital formation advocacy.


In conclusion, our Office has a full plate operating with a lean yet talented team that is passionate about supporting capital formation for small businesses and their investors. Each of you has chosen to be here because you are interested in securities regulation. It is my hope that, in addition to gaining CLE credits today, you have learned something new that the SEC is doing to proactively support smaller businesses and their investors, strengthening the third leg of our mission by facilitating capital formation. I also hope going forward to hear from you and to learn from your experiences, and for you to spread the word about our Office, our team, and the opportunity you and the businesses and investors you support have to shape capital formation policy for the better.

Thank you for your time today, and thank you to the PLI team for putting on a fantastic conference. I am honored to share the stage with the public servants I am lucky to now call my colleagues.

[1] The Office’s 2019 Foundational Business Plan is available at

[2] Small Business Capital Act of 2016 (P.L. 114-284).

[3] 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.

[4] According to the U.S. Small Business Administration, small businesses with under 500 employees accounted for 66% of net new jobs from 2000 to 2017 and 47.5% of private sector employees in 2015. See U.S. Small Business Administration, “What’s New With Small Business” (Aug. 2018), available at

[5] The legislation that created our Office also established a Small Business Capital Formation Advisory Committee at the SEC. See 15 U.S.C. §78qq. These parameters on the categories of businesses to be included as “small businesses” are enumerated in connection with that Advisory Committee and are what we will use for our Office as well.

Last Reviewed or Updated: May 14, 2024