The SEC’s Office of the Advocate for Small Business Capital Formation recently released and shared with Congress its 2025 Staff Report. This report highlights of the Office’s outreach and public engagements during fiscal year 2025, and provides data on small business capital raising. The Staff Report notes that, because the Commission does not presently have an Advocate to submit a statutory Annual Report to Congress as required by law, the Staff prepared the Staff Report in lieu of the required Annual Report. Some highlights from the Staff Report include:

1. Consistent with past experience, offerings exempt from registration pursuant to Regulation S and Rule 144A amounted to $1 trillion, while Rule 506(b) and Rule 506(c) offerings were $378 billion and $24 billion, respectively. Rule 504, Regulation A and Regulation Crowdfunding constituted a much smaller proportion of exempt offerings, collectively amounting to approximately $1.7 billion.

2. U.S. private companies raised 36% of all capital raised by U.S. companies, with U.S. public companies raising the balance of approximately $2.3 trillion in capital raised.

3. The median capital raise utilizing Regulation Crowdfunding was just $114,000, and more than half of the issuers raising capital under this exemption were under three years old.

4. From June 2015 to 2024, 93% of Regulation A offerings were Tier 2 (by amount sought).

5. Over the past five years, the amount of capital raised by venture capital funds has declined significantly, as fund managers have faced a challenging environment.

6. From 2014 to 2024, the number of companies remaining private eight years or more after receiving their first VC round has quadrupled.

7. While IPOs have remained historically low over the last three years, the number of offerings and offering proceeds have recently trended upward.

8. In 2024, IPOs by small companies represented 44% of all IPOs, but only 3% of total capital raised.

9. Since 2000, VC-backed companies accounted for 51% of all IPOs and 66% of technology IPOs.

10. During fiscal 2025, the Office of the Advocate for Small Business Capital Formation held 55 events with over 60 partner organizations, involving over 2,500 attendees. I was honored to participate in the 44th Annual Small Business Forum, which took place in April 2025.

As the Commission’s focus shifts toward rulemaking to enhance capital-raising opportunities for smaller businesses, all of the Office’s insights will undoubtedly be critical to that process.

– Dave Lynn