May 11, 2023

SEC’s Small Business Capital Formation Advisory Committee: 14 New Members!

Last week, on the heels of the “42nd Annual Small Business Forum,” the SEC announced that it had appointed 14 new members to its Small Business Capital Formation Advisory Committee. These new members are filling vacancies arising primarily from the expiration of prior members’ terms – but since the entire Committee is only 20 people and several of them are non-voting government representatives, this represents turnover of all but 2 “at-large” positions. Dave blogged about the nominations process earlier this year.

The Committee meets quarterly and provides advice and recommendations to the Commission on rules, regulations, and policy matters relating to small businesses, including smaller public companies. Members include entrepreneurs, investors, and advisers who work with early stage private companies and smaller public companies – as well as the SEC’s Advocate for Small Business Capital Formation and three non-voting members appointed by each of the SEC’s Investor Advocate, the North American Securities Administrators Association (NASAA), and the Small Business Administration, as well as an observer appointed by the Financial Industry Regulatory Authority (FINRA).

The departing members shared these “parting thoughts” back in February, which urged the SEC to make it easier and more efficient for companies to raise capital regardless of geographic location (i.e., encourage growth in “flyover country”) – and to continue to pay attention to these 5 objectives:

1. Recognize the importance of the private markets for small business growth.

2. Ensure public company rules are mindful of the unique circumstances of small public companies, so that these small companies can attract capital, spur innovation, and create jobs.

3. Allow retail investors greater access to a wider range of investment opportunities.

4. Support rules to facilitate the existence and growth of small funds.

5. Continue to protect investors through effective enforcement and more education and outreach.

Liz Dunshee