Remarks at the Meeting of the Small Business Capital Formation Advisory Committee

Good morning.  I’m very pleased to be here today and to hear from all of you.  Almost a year in, it seems unnecessary to comment on the fact that the format of this event is not our typical format, or on the fact that the Commission, this Committee, and Martha and her team have been able to continue this important work in the face of unprecedented circumstances.  We at the SEC have slipped relatively easily into remote work, and while there have been a few hiccups along the way, many of us have grown accustomed to this new normal. 

This ease and acclimation, however, are all the more reason to highlight the work of this Committee.  Not every enterprise in America can so easily go remote.  Not every business lends itself to remote work.  Not every business is equipped to run with a remote workforce. 

As the 2020 Annual Report from the Office of the Advocate for Small Business Capital Formation (or OASB) so cogently lays out, the last year has been crushing for many small businesses.  While larger companies have relied on reserves to pull through, or to re-tool, or re-orient for the pandemic world, smaller companies have floundered, and many shut their doors.[1]  The toll has fallen heavily on women- and minority-owned businesses.[2]   It is disheartening to see our small businesses struggling, and to see the rippling effects their hardships wreak on their workers and surrounding communities. 

With vaccines rolling out throughout the country, we can hope that 2021 will bring brighter days for all of us, and especially for entrepreneurs and small business owners and their workers.  As these companies emerge from the COVID-19 experience, it is vital that capital be waiting for them so that they can rebuild quickly and soundly.

This Committee and the OASB were created in recognition of the fact that the SEC’s orientation has not always been toward the smaller company, or the company that will never have a big IPO, but that nonetheless is profitable, stable, and valuable to its customers, investors and communities.  OASB has done remarkable work reaching out to many types of small businesses and entrepreneurs across the country, an effort that I believe has had enormous impact in the short span of time the Office has been up and running.  Similarly, this Committee’s work, including your recent recommendations last spring regarding CrowdFunding relief, have been vital to the Commission’s understanding of small business needs.

I am grateful for all your work and urge that we need your voices now more than ever to advise the Commission on what steps we can take to help small businesses looking to rebuild.  We recently expanded 701 to provide access to profit-sharing for more workers.  What else can we do to make smaller and younger companies better able to compete for talent?  We have seen the options for capital-raising proliferate over the last several years, revitalizing Regulation A, expanding the availability of private offerings, and introducing brand new concepts such as Regulation CF.  What other innovations should we consider?  What has been the most useful to smaller companies, and what could be improved?

I have always appreciated the insight this group provides the Commission.  Thank you all for your continued engagement and guidance.  I look forward to the ideas you will develop over the coming year and want to stress to you that my [virtual] door is open if you would like to share them with me and my team.  Thank you all.