Learning from Miami’s Emprendimientos

Introductory Remarks at the Roundtable on Raising Capital in Partnership with the Miami-Dade Beacon Council

¡Buenos días, todos! On behalf of our team at the U.S. Securities and Exchange Commission, thank you for joining us today to talk about your experiences raising capital in this diverse and culturally vibrant region, and thank you to the Miami-Dade Beacon Council for gathering us together for this roundtable conversation.[1] As Stanley [Rigaud] mentioned, my name is Martha Miller, and I have the privilege of leading the SEC’s Office of the Advocate for Small Business Capital Formation. We are meeting just shy of this Friday’s one-year anniversary of the establishment of our Office, and like many start-ups, our first year was one of building, learning, and iterating on successes. One differentiator for our government start-up from most start-ups with which you engage: I come with a mandatory disclaimer that the perspectives I share with you today are solely my own.[2]

I am particularly excited to ring in our first year of operations conducting outreach in the Miami area, a region recognizable worldwide for your diversity and cultural vibrancy. As the number one metro area in the U.S. for Latinx entrepreneurship, coupled with the highest percentage of immigrant-owned businesses in the country,[3] I look forward to learning more from your diverse perspectives today about how you are building successful companies so we can take those lessons back to Washington, DC and help other regions build, grow, and thrive.

Lucky for each of you today, I will keep my Spanish to the basics. As tested over the December holidays, my Spanish comes out with a confusing Romance language mixture of Italian numbers, French verb conjugations, and wild hand gestures to compensate for the confusion I know I’m causing the listener. That said, it’s an amusing scene to watch, as my husband witnessed when I negotiated our rental car at the airport counter. “Vaso de gasolina” is a poor translation for gas tank, which I did not want to pre-purchase. My husband is quite used to my earnest attempts to create phrases to express myself in other languages, the two of us having met in Spanish class almost a decade and a half ago. To this day we still often refer to each other using the diminutive names from our teacher: Juanito and Martita. As you can see from my height, I am far from a “Little Martha,” but I welcome the nickname solamente from him and nuestra profesora.

I tell you this story about the perils of me speaking in languages I do not use every day because it parallels quite well with what we focus on daily at the SEC: capital raising under our securities laws. If I take a show of hands, many of you are likely familiar with the terms crowdfunding, private offering, accredited investor, IPO, or convertible note. At some point if you went down the path of raising capital, you likely became quite familiar with the technical details of the regulatory pathway you used, working closely with your version of my patient profesora, likely a lawyer, accountant, or other advisor, who is an expert and deals with those rules regularly and helped you speak the language of capital raising. However, like a language not used daily, those technical details and the nuance to raising capital likely faded to the background of your memory until you need them again later (in which case, like me, you likely would need to brush up considerably). With language, there are a lot of tools available to learn and refresh skills, from in-person classes, to online learning from your DuoLingos and Rosetta Stones of the world. Yet with securities laws and capital raising, those resources are a little more difficult to find, and often difficult to understand without a law degree. Our Office is working on changing that, and we want to create new resources to empower entrepreneurs to raise the capital you need. We already have fantastic resources for investors from our Office of Investor Education and Advocacy at Investor.gov, which I encourage you to check out. So here is my first ask of you today: tell us what you most want to know so that we can prioritize that in our roll-out.

My next ask of you is to be candid with us today. My colleague Jessica McKinney and I have been looking forward to meeting with you and hearing your stories about building successful companies. You each have a compelling story to tell as entrepreneurs, founders, and community leaders who have navigated what I know well from personal experience is a challenging landscape to raise the funding you need to thrive. For example, yesterday we met with an angel network founder and nonprofit leader here in Miami. He highlighted the challenges he sees in bringing capital off of the sidelines to support start-ups rather than focusing solely on real-estate. He underscored that within the Latinx and Hispanic communities here, there is considerable wealth, but the business community lacks familiarity with how to best support emerging companies. Those insights are valuable to us.

For our many women in the room, I am also excited to hear your stories about building companies in the state of Florida, which has consistently led the country in growth of women-owned businesses.[4] This area, as you know well, has a long history of women as entrepreneurs who positively impacted the region. While there are countless stories of the people that helped make this city the vibrant region it is today, one story that stands out to me is that of Julia Tuttle,[5] the “Mother of Miami” (making Miami the only major city in the U.S. to be founded by a woman[6]). In the late 1800s, Julia found herself a widow and in financial trouble, learning that her late husband had not been good at managing money. She packed up in Cleveland, Ohio, headed south, and purchased 640 acres of orange groves[7] in what is now the heart of the City of Miami. Julia saw in this region great potential to build a center of trade for the United States and Latin America, and she tapped her entrepreneurial grit to bring her vision to life.

For commerce to flourish and for the trade of oranges to thrive, Julia recognized that the Biscayne Bay area needed a railroad connection. Like many entrepreneurs, her first pitches were met with rejection. She focused her attentions on Henry Flagler, who also initially rejected her proposal. Undeterred, Julia seized upon a freeze that devastated orange groves and farms across central and northern Florida, viewing it as an opportunity for her pitch. She sent Flagler a package of healthy orange blossoms from her land, showing the economic promise of the area below the frost line. Flagler was convinced, and he began laying the track to extend the railroad to Miami. When the first train entered what is now Miami in 1886, it jumpstarted a flurry of activity and development, forever expanding the commercial opportunities in the region.

I find myself magnetized by her story, and not only because of how powerful I find it to imagine a single woman in the 1800s making such waves in commerce and transportation. It is also a timeless story of entrepreneurship, laden with the same themes many of you face in 2020 with your businesses: innovative ideas met by skepticism and rejection from investors, potential business partners, and even friends and family. It is often the clarity of vision, patience, and determination that sets apart those who succeed from those whose ideas are never known.

Julia Tuttle is just one of the many impactful and inspiring entrepreneurs that has made Miami the thriving multicultural region that is internationally recognizable today. As entrepreneurs and thought leaders, you each bring valuable perspective that lawmakers and regulators need to hear in the same way that the male railroad tycoons from up north needed to hear Julia’s ideas. While I could go on for far too long with parallels to Miami’s history, I am excited to hear your current day stories. Let’s dive into discussion and turn it over to our more exciting speakers today: each of you.