U.S. SECURITIES AND EXCHANGE COMMISSION

BUSINESS

FORUM

SMALL

REPORT ON THE 40T H ANNUAL

05.24.21—05.27.21
The U.S. Securities and Exchange Commission (SEC) annually hosts the Government-Business 

Forum on Small Business Capital Formation. The recommendations contained in this report 

were developed and drafted by the 2021 Forum participants. The recommendations are not 

endorsed or modified by the SEC and, as with the remarks of SEC Commissioners and staff 

published in this report, do not necessarily reflect the views of the SEC, its Commissioners, 

or any of the SEC’s staff members.

Digital copies of the prior reports and other materials relating to previous Forums, dating 

back to 1993, are available online.
REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM | i

 2021 FORUM AT A GLANCE

4 DAYS

6

HOURS

of content

1,343 HOURS 

live-streamed

20

POLICY

recommendations

40

tweets from 

@SEC_News

1.6 million

TWITTER impressions

only

1 clickto ENGAGE

REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM | iii

 CONTENTS

FORUM HIGHLIGHTS..........................................................................................................................1

Day 1: Finding Your First Dollars: 

Navigating Your Way to Raise Early Rounds ......................................................9

Day 2: Doing Your Diligence

How Savvy Early-Stage Investors Build Diversified Portfolios...................13

Day 3: Diversifying Capital Allocators

Tools for Emerging and Smaller Funds and Their Managers..................... 18

Day 4: Small Cap Insights

Perspectives on Smaller Public Companies .....................................................23

ADVISORY PLANNING GROUP..................................................................................................27

SEC OFFICIALS’ REMARKS......................................................................................................... 29

Opening Remarks from Martha Legg Miller.................................................................. 29

Chair Gary Gensler................................................................................................................... 33

Commissioner Hester M. Peirce.......................................................................................... 35

Commissioner Elad L. Roisman...........................................................................................37

Commissioner Allison Herren Lee ..................................................................................... 39

Commissioner Caroline A. Crenshaw................................................................................ 41

ABOUT THE OFFICE OF THE ADVOCATE 

FOR SMALL BUSINESS CAPITAL FORMATION..................................................................43
Monday, May 24

Finding Your 

First Dollars

Navigating Your Way to 

Raise Early Rounds

Tuesday, May 25

Doing Your 

Diligence

How Savvy Early-Stage 

Investors Build Diversified 

Portfolios

Wednesday, May 26

Diversifying 

Capital Allocators

Tools for Emerging and Smaller 

Funds and Their Managers

Thursday, May 27

Small Cap 

Insights

Perspectives on Smaller 

Public Companies
REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM | 1

 FORUM HIGHLIGHTS

The SEC’s annual Small Business Forum is a unique event where members of the public and 

private sectors gather to provide feedback to improve capital raising policy.1 The Forum 

covers a broad range of issues affecting small businesses and their investors, from early-stage 

entrepreneurial ventures to smaller public companies. 

This year marked the 40th Forum, which the SEC hosted virtually over four days from May 24 

to 27, 2021. Each day featured a different topic, with speakers highlighting success stories, 

as well as areas for policy improvement.

The event is led by the SEC’s Office of the Advocate for Small Business Capital Formation, 

in collaboration with each of the Commissioners and many other offices and divisions across 

the agency.

POLICY RECOMMENDATIONS

A hallmark of the Forum is the opportunity for participants to develop policy recommendations 

to improve capital raising. Based on feedback from prior Forums, this year we invited 

participants to submit recommendations in advance using an online portal, as well as “chat” 

them in during the live event. Doing so fostered a more inclusive environment where all voices 

could be heard and cut back on lengthy deliberations to be more efficient with participants’ time.

At the conclusion of each day’s panel discussion, participants prioritized the relevant 

recommendations based on their perceived positive impact on capital formation. This report 

includes the top five recommendations for each day.

Alongside each recommendation is a response from the Commission, noting any corresponding 

policy initiatives that have been made public.2 The Commission will consider Forum 

recommendations alongside other public comments for relevant policy initiatives.
2 | REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM

 ENGAGING PUBLIC PARTICIPANTS

Participants in the Forum bring a breadth of perspective to the policy deliberations, approaching 

the capital raising ecosystem from a variety of backgrounds, geographies, and life cycle stages.3

5 SEC

COMMISSIONERS

11 guest 

SPEAKERS

14

SEC STAFF

appearances

12

SEC SMALL 

BUSINESS 

ADVOCACY

team members

610

registered 

participants from

40 STATES and 

17 COUNTRIES
REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM | 3

PRIMARY PROFESSIONAL ROLE

Founder, Entrepreneur, 

or Business Leader

Attorney, Accountant, 

or Professional Advisor

Investor

Government

Academic/Researcher

Advocacy or Trade Association

Community/Nonprofit Leader

Other

Media

PRIMARY SEGMENT OF THE CAPITAL FORMATION LIFE CYCLE

Small and Emerging 

(e.g., Pre-Seed, 

Seed, Series A-B)

Mature and Later Stage 

(e.g., Series C+)

Smaller Public Company 

(Pre- or Post-IPO)

230 first-time Forum 

participants
4 | REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM

Participants brought diverse perspectives, self-identifying as:

126

Minority-owned 

business or investor

94

Woman-owned 

business or investor

52

Located in or investing

in a rural community

Located in or investing in 

an area recently impacted 

by natural disasters

33

Participants shared preferences for educational or informational resources on capital raising that 

the SEC can provide, prioritizing: user preference

Fact sheets

Q&A guides

Interactive modules

Infographics

Videos

Glossary
REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM | 5

 TAKING THE PULSE OF THE PARTICIPANTS

Each day at the start of the sessions, participants could voluntarily answer polling questions that 

provided context on their individual experiences, background, and ideas to better inform the 

discussion and contextualize the issues presented.

DAY 1: FINDING YOUR FIRST DOLLARS

Participants brought breadth of experience in raising capital from a variety of sources:

Friends and Family

Venture 

Capital

Angel 

Investors

Reg A

Public 

Offerings

Reg 

CF

Participants also highlighted their perspectives on the greatest barriers to accessing capital: burdensome

Networks and connections to investors

Laws, policies, and regulations

Investor bias

Personal wealth or assets

Information, education, and knowledge

Valuations or offering terms
6 | REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM

DAY 2: DOING YOUR DILIGENCE

Participants shared feedback on where they find success in sourcing investment opportunities: successful

Network referrals

Broker/dealers or other 

financial professionals

Accelerators/incubators

Social media

Demo days

Public press

Participants expect to source investment opportunities from a variety of locations:

Nationally

Locally

Regionally

Internationally
REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM | 7

DAY 3: DIVERSIFYING CAPITAL ALLOCATORS

Participants highlighted the greatest challenges facing emerging and regional fund managers: challenging

Access to a network of investors

Lack of track record

Regulatory barriers to entry

Significant personal financial 

risk for general partner

Participants generally found that emerging fund managers are more likely than other fund 

managers to invest in women- and minority-owned businesses.
8 | REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM

DAY 4: SMALL CAP INSIGHTS

Participants weighed in with a variety of challenges facing smaller public companies seeking to 

access capital: challenging

Cost of compliance

Burden of reporting requirements

Short-termism

Research coverage

Trading volume

Participants also highlighted top priorities for public companies when it comes to their 

shareholders and investor relations: priorities

Understanding shareholder base

Meeting the demands of investors, 

include those focused on ESG issues

Attracting more institutional investors

Engaging with retail investors

Having a dialogue with shareholders and 

responding to shareholder proposals
REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM | 9

MON

May 24

FINDING YOUR FIRST DOLLARS

Navigating Your Way to Raise Early Rounds

Agenda

1:00 P.M. Welcome Remarks from Martha Legg Miller, SEC Small Business 

Advocacy Team

1:05 P.M. Remarks from Chair Gary Gensler

1:10 P.M. Remarks from Commissioner Hester M. Peirce

1:15 P.M. Panel Discussion, moderated by Charlie Guidry, SEC Division of 

Corporation Finance’s Office of Small Business Policy

2:00 P.M. Voting to Prioritize Submissions

2:10 P.M. Closing Remarks from Colin A. Caleb, SEC Small Business 

Advocacy Team

Panel Speakers

MEGAN HOLSTON-ALEXANDER

Partner

Cultural Leadership Fund

San Francisco, CA

Megan is a partner at Andreessen Horowitz’s Cultural Leadership Fund. 

In this role, she connects cultural leaders to the best new technology 

companies and engages, empowers, and elevates Black talent, entrepreneurs, and investors across the 

technology industry. Prior to joining Andreessen Horowitz, Megan worked in consumer technology 

investing at the early-stage venture capital firm she helped launch during business school.

MAXEME TUCHMAN

CEO and Co-Founder

Caribu

Miami Beach, FL

Max co-founded Caribu, an interactive video-calling platform for 

children to host virtual playdates with friends and family when they 

cannot be physically together. She is the first Latinx founder, male or female, to raise $1 million 

using investment crowdfunding, the 59th Latina in the U.S. to raise over $1 million in venture 

funding, and the winner or finalist in over 30 pitch competitions.
10 | REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM

SHONDRA WASHINGTON

President and Co-Founder

TBC-Capital

New York, NY

A veteran of the financial services world, Shondra founded TBC-Capital 

to democratize access to information to help underrepresented founders 

in tech and consumer products raise capital and access on-demand CFO, business development, 

and strategy services. She is the host of CrowdHouse, offering weekly pitch practice sessions to 

founders via the ClubHouse platform.

Highlights from Panel Discussion

» Entrepreneurs and their businesses should be prepared in advance for capital raising, so that 

they can respond when opportunities arise.

» Pitch competitions and crowdfunding can be lucrative alternatives for businesses too small 

for venture capital investment but too large for a friends and family round.

» Founders should be educated about the various forms of capital raising.

» A big barrier for women—especially Black women—getting capital is finding investors.

» When making investment decisions, investors often look for things that materially change 

consumer behavior. Often that behavior is moved by culture, and a lot of times that is Black 

and Brown culture, so we should have those people in the room. Having that diversity 

around the table helps identify opportunities and not miss out on amazing founders.

» Venues that enable founders to practice their pitches also help to expand the founders’ 

networks.

» In the early capital raising stages, finding the right investors means finding the right partners 

and advisors who have the right experience and founders’ best interests at heart.
REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM | 11

Participants’ Policy Recommendations

Ensure capital raising rules provide equitable access to capital for 

underrepresented founders and investors.

COMMISSION RESPONSE

On November 2, 2020, the Commission adopted a set of rule amendments designed to facilitate 

capital formation and increase opportunities for investors by expanding access to capital for small 

and medium-sized businesses and entrepreneurs across the United States (Capital Formation 

Adopting Release).4

 In that release, the Commission acknowledged concerns about how our capital 

markets are serving underrepresented founders and investors, encouraged further specific, tangible 

suggestions for action by the Commission, and expressed its commitment to continued engagement 

on this topic.

The Commission regularly evaluates ways to improve its capital raising rules and will consider this 

Forum recommendation in connection with this initiative.

Establish a micro-offering exemption with minimal disclosure 

requirements.

COMMISSION RESPONSE

On June 18, 2019, the Commission published for public comment a concept release on ways to 

simplify, harmonize, and improve the exempt offering framework to promote capital formation and 

expand investment opportunities while maintaining appropriate investor protections (Harmonization 

Concept Release).5

 On March 4, 2020, the Commission proposed rule amendments to harmonize 

and streamline the Commission’s rules for exempt offerings under the Securities Act of 1933 

(Securities Act) in order to enhance their clarity and ease of use (Capital Formation Proposal), many 

of which were adopted in the Capital Formation Adopting Release.6 In connection with both the 

Harmonization Concept Release and the Capital Formation Proposal, the Commission sought and 

received public comment on whether it should consider creating a micro-offering exemption.

The Commission will continue to consider the comments received and this Forum 

recommendation in connection with ongoing initiatives.
12 | REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM

Revise Regulation Crowdfunding to remove the GAAP financial 

statement requirement for businesses seeking to raise a small amount.

COMMISSION RESPONSE

In the Harmonization Concept Release, the Commission sought and received public comment on 

whether to consider revisions to the Regulation Crowdfunding financial statement requirements. 

Commenters on the Capital Formation Proposal also provided feedback on the Regulation 

Crowdfunding financial statement requirements.

The Commission will continue to consider the comments received and this Forum recommendation 

in connection with ongoing initiatives.

Provide state preemption for secondary transactions for shares issued 

under Regulation A and Regulation Crowdfunding.

COMMISSION RESPONSE

In the Harmonization Concept Release, the Commission sought public comment on whether 

federal preemption should be extended to additional offers and sales of securities. In addition, the 

Capital Formation Proposal requested comment on whether the Commission should extend federal

preemption to secondary sales of Regulation A or Regulation Crowdfunding securities.

The Commission will continue to consider the comments received and this Forum recommendation 

in connection with ongoing initiatives.

Clarify the status of digital assets to make clear when it is a security.

COMMISSION RESPONSE

In determining the applicability of the U.S. federal securities laws to a digital asset, a threshold issue 

is whether the digital asset is a “security.”7

 In the DAO Report published in 2017, the Commission 

explained how the Howey test applies to a digital asset issuance.8

 In 2019, the staff of the SEC’s 

Strategic Hub for Innovation and Financial Technology (FinHub) published a framework for 

analyzing whether a digital asset is an investment contract and whether offers and sales of a digital 

asset are securities transactions.9

We encourage market participants looking to determine whether a digital asset is a security to seek 

the advice of securities counsel and engage with FinHub staff.

10
REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM | 13

TUE

May 25

DOING YOUR DILIGENCE

How Savvy Early-Stage Investors Build 

Diversified Portfolios

Agenda

1:00 P.M. Welcome Remarks from Dean A. Brazier, Jr., SEC Small Business 

Advocacy Team

1:05 P.M. Remarks from Commissioner Elad L. Roisman

1:10 P.M. Introduction by Martha Legg Miller, SEC Small Business Advocacy Team

1:15 P.M. Panel Discussion, moderated by John Moses, SEC Office of Investor 

Education and Advocacy

2:00 P.M. Voting to Prioritize Submissions

2:10 P.M. Closing Remarks from Julie Zelman Davis, SEC Small Business 

Advocacy Team

Panel Speakers

GRACE RAINS

Executive Director

Ark Angel Alliance

Conway, AR

Grace leads an Arkansas-based angel investor group, which pursues active 

investment in local startups and fosters the entrepreneurial ecosystem in 

the state and broader region. She also serves as Director of Operations at the Conductor, a publicprivate partnership with the University of Central Arkansas focused on empowering entrepreneurs, 

innovators, and makers.

ELI VELASQUEZ

Co-Founder and Managing Partner

Investors of Color Network

Amherst, MA

Eli serves as an advisor, board member, and angel investor supporting 

science and technology ventures. As founder of the Investors of Color 

Network, Eli works to connect Black, Latinx, and Asian accredited investors and allies to close the 

racial funding gap in startup capital, build generational wealth, and cultivate investor networks. Eli 

also serves on the board of the Angel Capital Association. 
14 | REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM

ELIZABETH YIN

Co-Founder and General Partner

Hustle Fund

San Francisco, CA

Using her prior experience as an entrepreneur, Elizabeth co-founded 

Hustle Fund, a pre-seed fund with a goal of democratizing access 

to funding for extremely early-stage software start-ups that might otherwise not get noticed. 

Previously, Elizabeth was a partner at 500 Startups, where she invested in seed stage companies and 

ran the Mountain View accelerator.

Highlights from Panel Discussion

» It is important to introduce minority accredited investors to startup investing, which 

expands the pool of capital available to underrepresented entrepreneurs.

» Momentum is important. Pre-seed funding can help early-stage entrepreneurs build 

momentum where network gaps may create limited access to capital.

» For investors looking to support underrepresented founders, they should take active 

approaches, such as social media statements that they are seeking investment opportunities.

» When an investor starts to understand the story of the founder of color, then the investor 

starts to see the common ground with the founder.

» When building a due diligence team for early-stage investments, identify potential gaps and 

gather the right people to engage in conversations and deal evaluations.

» Develop and sharpen an investment thesis and an impact thesis. This can help ensure value 

alignment between the investment goals and the portfolio companies.

» Providing feedback, even if an investment is not made, can benefit founders and help them 

grow their business or prepare for the next pitch.

» Consider alternative ways for investors to help founders, such as advice or network 

introductions.

» Do not be afraid to give blunt feedback. This enables founders to make changes and, 

potentially, receive an investment from investors that had previously passed on the founder.

» Angel investing is high risk, high reward. The keys are building a diversified portfolio, crossvertical, cross-stages, to mitigate that risk with the understanding, at the outset, that it will 

be a long-term investment.

» An IPO is not a viable exit strategy for angel investors, so it is important to have 

conversations with founders about their potential for acquisition, which is often not a 

consideration for founders at the angel investment stage. Simultaneously, angel investors 

should keep in mind that the interest in private markets creates a liquidity opportunity for 

an exit during subsequent investment rounds.

» Finders add another layer of due diligence to understand the relationship between the 

founder and the finder.
REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM | 15

Participants’ Policy Recommendations

Expand the accredited investor definition to include other measures 

of sophistication, such as specialized industry knowledge or 

professional credentials.

COMMISSION RESPONSE

On August 26, 2020, the Commission adopted amendments to the definition of “accredited

investor” under Regulation D of the Securities Act that added new categories of qualifying natural 

persons and entities and made certain other modifications to the existing definition (Accredited 

Investor Adopting Release).11 The amendments permit natural persons to qualify as accredited 

investors based on certain professional certifications, designations, or credentials. The amended 

rule includes a nonexclusive list of attributes that the Commission will consider in determining 

which professional certifications and designations or other credentials qualify a natural person for 

accredited investor status. In a related order, the Commission designated holders in good standing 

of the Series 7 (Licensed General Securities Representative), Series 65 (Licensed Investment Adviser 

Representative), and Series 82 (Licensed Private Securities Offerings Representative) licenses as 

accredited investors.12

The Commission may designate additional qualifying professional certifications, designations, and 

other credentials by order. Members of the public may propose to the Commission that additional 

certifications, designations, or credentials should be included in the accredited investor definition, 

such as a specific degree or program of study. As another example, an accredited educational 

institution, self-regulatory organization, or other industry body that believes that it has a program 

of study or credential that fulfills the attributes to be considered as a qualifying professional 

certification, designation, or credential may apply to the Commission for consideration. Any 

request for Commission consideration must address how a particular certification, designation, 

or credential satisfies the nonexclusive list of attributes set forth in the new rule, and may include 

additional information that the requestor believes the Commission may wish to consider. Such 

requests may be submitted to the staff at investorcredentials@sec.gov.
16 | REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM

Expand retail investor access to funds that invest in private offerings 

and support underrepresented entrepreneurs.

COMMISSION RESPONSE

The Commission and its staff have heard from market participants interested in expanding

retail investor access to funds seeking to invest in earlier-stage exempt offerings. In addition, the 

SEC’s Asset Management Advisory Committee (including its Private Investments Subcommittee 

and Diversity and Inclusion Subcommittee) and the Small Business Capital Formation Advisory 

Committee13 have both weighed in on this topic. The Commission will consider the Forum 

Recommendation in connection with its various initiatives.

Expand the accredited investor definition to include an investor 

certification course or test whose curriculum has been approved by 

FINRA or the SEC.

COMMISSION RESPONSE

As described above, the Accredited Investor Adopting Release amended the definition of accredited 

investor to permit natural persons to qualify as accredited investors based on certain professional 

certifications, designations, or credentials, and includes a nonexclusive list of attributes that the 

Commission will consider in determining which professional certifications and designations or other 

credentials qualify a natural person for accredited investor status.

Members of the public may propose to the Commission that additional certifications, designations, 

or credentials should be included in the accredited investor definition, such as a specific degree 

or program of study. As another example, an accredited educational institution, self-regulatory 

organization, or other industry body that believes that it has a program of study or credential 

that fulfills the attributes to be considered as a qualifying professional certification, designation, 

or credential may apply to the Commission for consideration. Any request for Commission 

consideration must address how a particular certification, designation, or credential satisfies the 

nonexclusive list of attributes set forth in the new rule, and may include additional information that 

the requestor believes the Commission may wish to consider. Such requests may be submitted to the 

staff at investorcredentials@sec.gov.
REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM | 17

Create more and better wealth-building opportunities for retail 

investors to build and support resilient and equitable local economies.

COMMISSION RESPONSE

In recent years, the Commission has made a number of changes to the federal securities laws to allow 

for greater direct access to capital opportunities for smaller companies and investors. For example, 

as described above, in the Accredited Investor Adopting Release the Commission adopted final rules 

that add additional ways for individuals to qualify as accredited investors and participate in private 

offerings. In addition, in the Capital Formation Adopting Release the Commission adopted a variety 

of rule amendments intended to promote capital formation and increase opportunities for investors. 

The Commission welcomes ideas for how our federal securities laws can support entrepreneurial 

ecosystems across the country while maintaining investor protection.

The Commission will consider this Forum recommendation and consult, as needed, with 

relevant stakeholders.

Adopt rules and coordinate with the states to allow community 

investment funds with sufficient regulatory oversight and flexibility 

to pursue community-based investments.

COMMISSION RESPONSE

As noted above, the Commission welcomes ideas for how our securities laws can empower investors 

to support their local economies. Through the SEC’s work overseeing investment products and 

services available to investors, staff often receive proposals and comments from stakeholders and 

investors on ways to improve the available investment opportunities. The Commission welcomes 

ideas for improvements to community-based investing, while maintaining investor protection.

The Commission will consider this Forum recommendation related to community investment funds, 

and consult, as needed, with relevant stakeholders.
18 | REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM

WED

May 26

DIVERSIFYING CAPITAL ALLOCATORS

Tools for Emerging and Smaller Funds and 

Their Managers

Agenda

1:00 P.M. Welcome Remarks from Jessica McKinney, SEC Small Business 

Advocacy Team

1:05 P.M. Remarks from Commissioner Allison Herren Lee

1:10 P.M. Remarks from Pamela A. Gibbs, SEC Office of Minority and 

Women Inclusion

1:15 P.M. Panel Discussion, moderated by Martha Legg Miller, SEC Small Business 

Advocacy Team

2:00 P.M. Voting to Prioritize Submissions

2:10 P.M. Closing Remarks from Jenny J. Choi, SEC Small Business Advocacy Team

Panel Speakers

GAYLE JENNINGS-O’BYRNE

General Partner and Co-Founder

WOCstar Fund

New York, NY

Gayle leverages depth of financial markets experience as the founder of an 

early-stage investment fund. The WOCstar Fund is focused on empowering 

inclusive teams and women of color to bring tech innovation to market. Gayle is also the host of 

the VCs Off the Record podcast, where she and other investors engage in “real talk” about capital 

raising and the venture capital industry.

SAMIR KAJI

Founder and CEO

Allocate

Menlo Park, CA

Following a career in venture and private investing, Samir founded Allocate, 

a platform that makes private fund investing more accessible by providing 

investors discovery, analytics, and access to high quality institutional firms. Samir is a member of 

Kauffman Fellows Class 20 and the host of the podcast Venture Unlocked, aimed at opening the 

playbook for raising and operating a venture capital fund.
REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM | 19

MICHAEL PIECIAK

Commissioner

Vermont Department of Financial Regulation

Winooski, VT

Mike is the chief regulator of Vermont’s financial services sector, 

including its Securities Division. A past president of the North American 

Securities Administrators Association (NASAA), Mike now serves as the chair of NASAA’s 

Corporation Finance Section. He is also a member of the SEC’s Small Business Capital Formation 

Advisory Committee.

Highlights from Panel Discussion

» Emerging managers face challenges in scaling their fund size, particularly if they are trying to 

raise more than $10 million.

» Fund managers in areas beyond the traditional hubs for early-stage investment enable small 

businesses in those areas to grow and scale where they started.

» Emerging managers are developing thriving entrepreneurial ecosystems, providing regional 

diversification, and investing in diverse founders.

» Investors should be willing to meet founders where they are located, including in so-called 

“flyover” places.

» Emerging manager evaluations should be tailored for the experience and circumstances of 

the managers. Successful managers in New York City will look different than successful 

managers in Kansas City.

» Institutional investors should rethink the traditional diligence processes, which overweighs 

historical performance. Emerging managers starting new funds are building a new product, 

requiring prospective diligence processes.

» Institutional funds should empower emerging managers to be successful. Non-traditional 

investment opportunities require non-traditional thinking.

» Diversity among the decision makers at institutional funds enables those funds to see 

successful opportunities that they otherwise may miss.

» Backing diverse managers provides a comparative advantage. They can bring strong track 

records, flexibility to the marketplace, and operational efficiencies.

» New and prospective managers should start investing early to develop a track record of their 

investment methodology and purpose.
20 | REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM

Participants’ Policy Recommendations

Increase the number of investors allowed in 3(c)(1) funds above 

99 investors.

COMMISSION RESPONSE

A 3(c)(1) fund is a type of pooled investment vehicle that is excluded from the definition of 

“investment company” under the Investment Company Act of 1940 (1940 Act) because it has no 

more than 100 beneficial owners and otherwise meets criteria outlined in Section 3(c)(1) of the 

1940 Act. 3(c)(1) funds are often used by venture capital firms and other early-stage investors who 

pool capital for investment in startups. 

Any amendments to Section 3(c)(1) to change the number of investors allowed would require 

Congressional action.

Increase the $10 million cap for 3(c)(1) qualified venture capital 

funds to allow a larger number of investors in smaller funds.

COMMISSION RESPONSE

A “qualifying venture capital fund” is a type of private fund that is excluded from the definition of 

“investment company” under Section 3(c)(1) of the 1940 Act because it:

(1) has not more than 250 beneficial owners;

(2) has not more than $10 million in aggregate capital contributions and uncalled capital 

commitments; and

(3) qualifies as a venture capital fund.

The SEC’s Small Business Capital Formation Advisory Committee recently submitted 

recommendations to make changes to qualifying venture capital funds to improve opportunities 

for underrepresented founders and investors.14

Any amendments to Section 3(c)(1) to change the $10 million cap would require Congressional 

action.15
REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM | 21

Support underrepresented and emerging fund managers and their 

investors through targeted resources, in collaboration with other 

federal agencies.

COMMISSION RESPONSE

The Commission supports efforts to improve accessibility of educational and technical resources 

to improve diversity among fund managers and investors. This spring, the SEC’s Small Business 

Advocacy Office, in partnership with other SEC offices and divisions, launched a “Cutting 

Through the Jargon” glossary16 to reduce barriers to entry for underrepresented and emerging 

investors and entrepreneurs and to improve accessibility of compliance content. The glossary 

includes foundational terminology, along with small business investing terminology, and fundspecific terminology. The Office also contemporaneously launched an Emerging Fund Manager 

virtual event series exploring the role of emerging fund managers and their investors in funding 

underrepresented founders across the country and empowering a new generation of investment 

decision-makers. The Commission welcomes continued engagement and ideas to improve the 

resources available for underrepresented and emerging fund managers and their investors.

In addition, the SEC’s Asset Management Advisory Committee continues to explore opportunities 

to support underrepresented and emerging fund managers through its Diversity and Inclusion 

Subcommittee.

The Commission welcomes ideas from underrepresented and emerging fund managers and their 

investors for specific resources and programming that would be most impactful to improve 

diversity among investment decision-makers.

Expand venture capital funds’ qualifying investments to include 

fund-of-funds investment in another venture capital fund, secondary 

securities acquired from founders and early-stage investors, and 

follow-on investments in emerging growth companies.

COMMISSION RESPONSE

An investment adviser to venture capital funds may qualify as an exempt reporting adviser 

that is not required to register with the SEC if the fund invests at least 80 percent of its assets in 

“qualifying investments” under Rule 203(I)-1 under the Investment Advisers Act of 1940.17 A 

“qualifying investment” generally consists of any equity security issued by a qualifying portfolio 

company that is directly acquired by a qualifying fund and certain equity securities exchanged for 

the directly-acquired securities.
22 | REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM

In the adopting release defining “qualifying investment,” the Commission discussed the possibility 

of expanding the definition to include secondary purchases and investments in other venture capital 

funds, but ultimately decided that such investments should be made pursuant to the 20 percent limit 

for assets that are not “qualifying investments.”18 Since then, the Division of Investment Management 

issued guidance relating to the definition of “venture capital fund” to clarify whether certain fund 

structures or actions could jeopardize a venture capital fund adviser’s ability to qualify as an exempt 

reporting adviser.19

The Commission will consider this Forum recommendation and will consult, as needed, with 

relevant stakeholders.

Support underrepresented emerging fund managers—specifically 

minorities and women—building funds that diversify capital 

allocators, engage sophisticated investors, and challenge pattern 

matching trends.

COMMISSION RESPONSE

The Commission supports efforts to improve diversity among fund managers and entrepreneurs 

who raise capital. As highlighted above, the SEC’s Small Business Advocacy Office recently launched 

a series of virtual events focused on emerging fund managers and released educational content to 

reduce barriers to entry for underrepresented entrepreneurs and their investors.

In addition, the SEC’s Small Business Capital Formation Advisory Committee recently submitted 

recommendations in 2020 and 2021 for the Commission to promote increased opportunities 

for diverse entrepreneurs and investors.20 The SEC’s Investor Advisory Committee submitted 

recommendations in March 2021 to address systematic wealth gaps and ensure that minority 

organizations have greater investment opportunities.21

Most recently, the SEC’s Asset Management Advisory Committee and its Subcommittee on 

Diversity and Inclusion recommended that the Commission focus on transparency of business 

practices for consultants who recommend investment advisers and investment funds to improve 

diversity among asset managers.22 

The Commission will consider this Forum recommendation in connection with these and 

other initiatives.
REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM | 23

THU

May 27

SMALL CAP INSIGHTS

Perspectives on Smaller Public Companies

Agenda

1:00 P.M. Welcome Remarks from Jenny Riegel, SEC Small Business 

Advocacy Team

1:05 P.M. Remarks from Commissioner Caroline A. Crenshaw

1:10 P.M. Introduction by Martha Legg Miller, SEC Small Business 

Advocacy Team

1:15 P.M. Panel Discussion, moderated by Sebastian Gomez Abero, 

SEC Small Business Advocacy Team

2:00 P.M. Voting to Prioritize Submissions

2:10 P.M. Forum Closing Remarks from Martha Legg Miller, SEC 

Small Business Advocacy Team

Panel Speakers

THOMAS HENSE

Chief Investment Officer, Equity

Fidelity Investments

Boston, MA

Tom serves as Chief Investment Officer in the Equity Division at Fidelity, 

where he leads the small cap, value, and income teams. Tom has held 

multiple roles in the organization, starting as a high yield analyst, subsequently co-directing equity 

research, and serving as portfolio manager for Fidelity Small Cap Value Fund and Fidelity Advisor 

Small Cap Value Fund.

SUE WASHER

President and CEO

Applied Genetic Technologies Corporation

Gainesville, FL

Sue was employee number two at AGTC, which uses a novel gene therapy 

platform to develop products designed to transform the lives of patients 

with severe genetic diseases. Sue built the company from a small academic spin-out to a leader in 

the field, leading the company through raising venture capital funding, an initial public offering on 

Nasdaq, multiple additional public offerings, and two major partnerships.
24 | REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM

Highlights from Panel Discussion

» Industry matters when planning capital raises. Entrepreneurs should consider their industryspecific capital raising challenges.

» More companies are accessing the private markets and staying private longer.

» Small boutique firms and internet communities have started to fill the research gap left by 

large, established banks. 

» Broadening the ability of a company to understand its shareholder base will make the public 

markets more attractive to young, innovative companies.

» Not all small companies are created equal. Look beyond the market cap to determine the 

actual size and access to resources. 

» Constant communication is important, and technology has made it easier to do so. 

Companies should post corporate filings and answers to common investor questions. 

» Companies should layout their ESG principles, governance models, diversity, and other 

information to help analysts and investors make ESG evaluations.

» It takes active work to build an inclusive environment. 

 Force recruiters to bring in diverse candidates. 

 Evaluate a candidate’s character and breadth of experiences. 

 Network aggressively and beyond your comfort zone.

 Be persistent, and never let someone dismiss you.

 Develop diverse experiences and skills to increase company attractiveness.

 Learn to make the “ask” from investors that may not look like you. 

 Stand up for yourself.

» Hire people for where you want the company to be in the future. 

» Market volatility tends to affect small companies more than larger companies, particularly if 

capital raising occurs frequently.

Participants’ Policy Recommendations

Improve research coverage of smaller public companies in light 

of challenges from the Global Research Settlement, FINRA 2241, 

MiFID II, and other obligations on broker-dealers.

COMMISSION RESPONSE

Staff in the Divisions of Trading and Markets and Investment Management have been actively 

engaged with market participants to better understand their concerns regarding the impact of 

MiFID II’s provisions on research, including research coverage. To assist market participants in 

complying with MiFID II in a manner that is consistent with federal securities laws, SEC staff 

issued three no-action letters in 2017, one of which took a temporary no-action position with 

regard to broker-dealers that receive certain unbundled payments for research from MiFID-affected 

clients.23 In November 2019, SEC staff extended the temporary no-action position until July 2023 

and stated its view that the use of certain client commission arrangements does not affect whether 

the broker-dealer exclusion may be available in connection with the receipt of payments for 

research under Exchange Act section 28(e).24
REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM | 25

Commission staff have sought and received public feedback on the evolving research landscape, 

including the impact of MiFID II on research coverage of small issuers. Moreover, as required by the 

Consolidated Appropriations Act, 2021, the staff is conducting a study to evaluate issues concerning 

the provision of and reliance upon research into small issuers (i.e., the demand for such research, the 

availability of such research, and other related topics). The Commission will consider this Forum 

recommendation in connection with these initiatives.

Increase the public float thresholds in the “smaller reporting 

company” and “accelerated filer” definitions.

COMMISSION RESPONSE

The Commission amended the “smaller reporting company” and “accelerated filer” definitions in 

recent years to expand the number of smaller companies eligible to comply with the scaled disclosure 

requirements and tailor the types of issuers that are included in the accelerated filer categories.

Specifically, in June 2018, the Commission adopted amendments that raised the thresholds in the 

smaller reporting company definition so that a company with less than $250 million of public float is 

eligible to provide scaled disclosures. A company with less than $100 million in annual revenues and 

either no public float or a public float that is less than $700 million is also eligible to provide scaled 

disclosures. In March 2020, the Commission adopted amendments to the accelerated filer and large 

accelerated filer definitions that exclude from these definitions an issuer that is eligible to be a smaller 

reporting company under the revenue test of the “smaller reporting company” definition, including 

that the issuer had annual revenues of less than $100 million and either no public float or a public 

float of less than $700 million.25

Consistent with the Commission’s and Congress’s historical practice of providing scaled disclosure 

and other accommodations for new and smaller issuers, and periodically reviewing size thresholds 

for different issuer categories, the Commission will consider this Forum recommendation in 

connection with future initiatives.

Increase the transparency of short selling and dark pool activities.

COMMISSION RESPONSE

In connection with short sale disclosure, self-regulatory organizations, including NYSE, Nasdaq, 

and FINRA, provide short selling information on their websites, and the Commission provides 

information on failures to deliver securities that may result from sales, including short sales. The 

Commission continues to monitor developments that have occurred since the completion of the 

2014 SEC staff report on the benefits and costs of real-time short sale reporting.26 The Commission 

will consider this Forum recommendation and consult, as needed, with relevant stakeholders.
26 | REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM

Facilitate creation of venture markets that provide investors with 

a transparent and regulated environment for trading in stocks of 

smaller companies.

COMMISSION RESPONSE

The Commission has heard from issuers, exchanges, and other market participants that a one-sizefits-all approach to market structure does not work for many public issuers, particularly small and 

medium sized companies. To accommodate a venture market for smaller public companies, the 

Commission issued a statement on market structure innovation that invited exchanges and other 

market participants to submit proposals designed to improve the secondary market structure for 

exchange-listed equity securities that trade in lower volumes, commonly referred to as “thinlytraded securities,”27 which are often also smaller-capitalization securities. 

Low trading volumes may drive higher transaction costs for investors, present challenges for 

investors seeking to establish or unwind meaningful positions, and negatively impact issuers’ 

cost of capital. The Commission asked for proposals to address these issues by improving the 

secondary market structure for thinly-traded securities. The Commission’s statement lays out 

various considerations that may be helpful for a proposal to address, including whether and 

under what circumstances it would be appropriate to suspend unlisted trading privileges on 

multiple exchanges and whether exemptive relief from Regulation NMS and other rules under 

the Exchange Act would improve trading and liquidity. The Commission asked for proposals 

to enhance trading and liquidity for this segment of the market while maintaining or improving 

market integrity. The Commission will consider this Forum recommendation and consult, as 

needed, with relevant stakeholders.

In connection with any new environmental, social, or governance 

(ESG) disclosure requirements, provide exemptions or scaled 

requirements for small and medium-sized companies.

COMMISSION RESPONSE

As indicated on the Spring 2021 Unified Agenda,28 the Division of Corporation Finance is 

considering recommending that the Commission propose rule amendments to enhance registrant 

disclosures regarding issuers’ climate-related risks and opportunities, human capital management, 

and diversity of board members and nominees. 

The Commission will consider this Forum recommendation in connection with these initiatives.
REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM | 27

OVERHEARD AT THE FORUM

“Taking the step to become a public company can be challenging, 

and we need to make our collective voices heard to mitigate those 

challenges. I hope that participants take away that with the right 

planning and an experienced team a small company can thrive in 

the public markets.”

 SUE WASHER

 President and CEO

 Applied Genetic Technologies Corporation

 Gainesville, FL

“Closing the racial funding gap ensures new innovations,

founders and business models are supported so they 

can contribute to our economic recovery. For investors 

looking for new opportunities, the future is new majority

entrepreneurs.”

 ELI VELASQUEZ

 Co-Founder and Managing Partner

 Investors of Color Network

 Amherst, MA

“[O]ne thing that I would really emphasize and recommend to 

people, especially if there are allocators listening here, is stop 

thinking of investing in diverse managers as some kind of tradeoff 

to returns. It’s not. In fact, these two things are absolutely 

congruent. And if you look at the statistics, having a diverse 

team member on your investment team allows you to see 

opportunities that you otherwise wouldn’t, and many of those 

opportunities are those outliers.”

 SAMIR KAJI

Founder and CEO

Allocate

Menlo Park, CA
28 | REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM

 ADVISORY PLANNING GROUP

The SEC’s Small Business Advocacy team convened an advisory planning group to provide 

strategic input on the Forum.29 Planning group members brought additional perspectives to 

the Forum planning process, weighing in on improvement opportunities from prior Forums, 

emerging issues impacting access to capital, highlighting potential speakers, and promoting the 

event within their networks.

Chair Martha Legg Miller

 Director, Office of the Advocate for Small Business Capital Formation

 U.S. Securities and Exchange Commission

Government & Regulatory Representatives

Jeffrey Stout Carmen West

Director, Office of Federal Office of Business Development

Program Finance U.S. Minority Business Development Agency

U.S. Department of the Treasury

Michael Pieciak

Gregory J. Dean, Jr. Commissioner, Vermont Department of 

Senior Vice President, Office of Financial Regulation

Government Affairs National Association of State Securities 

FINRA Administrators

Business & Professional Organization Representatives

Faith Bautista John Dearie

President & CEO Founder & President

National Diversity Coalition Center for American Entrepreneurship

Greg Brown Erica Duignan Minnihan

Professor of Finance and Executive Director Founder

University of North Carolina 1000 Angels

Keenan Institute of Private Enterprise

Patrick Gouhin

Nicole Cadman Executive Director

General Counsel Angel Capital Association

Y Combinator

Tiffany Henry

Jessica Chin Foo Director of Entrepreneurial Communities

Pride Economic Impact Index Manager The Arkansas Conductor

StartOut

Victor Hwang

Charles Crain Founder/CEO

Director, Tax & Domestic Economic Policy Right to Start

National Association of Manufacturers
REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM | 29

Joe Kapp Liz Sara

Founder Chair

RuralRISE National Women’s Business Council

Samara Mejia Hernandez Charlotte Savercool

Founding Partner Senior Director, Government Affairs

Chingona Ventures National Venture Capital Association

Ken Nguyen Jennifer J. Schulp

CEO, Republic Director of Financial Regulation Studies

Association of Online Investment Platforms Center for Monetary and Financial Alternatives

Cato Institute

Carlo Passeri

Director, Capital Markets and Financial John Stanford

Services Policy Co-Executive Director

Biotechnology Innovation Organization Small Business Roundtable

Andre Perry, Fellow Evan S. Williams

Metropolitan Policy Program Director, Center for Capital Markets The Brookings Institution Competitiveness

U.S. Chamber of Commerce Bonnie J. Roe

Chair of the Small Business Issuers Zoe Willingham Subcommittee, Business Law Section’s Research Associate Committee on Federal Regulation of Securities Center for American Progress American Bar Association

Sevetri Wilson Rodney Sampson

Executive Chairman & CEO Founder and CEO

Resilia Opportunity Hub and OHUB Foundation
30 | REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM

 SEC OFFICIALS’ REMARKS

OPENING REMARKS OF MARTHA LEGG MILLER

Director

Office of the Advocate for Small Business Capital Formation

Good afternoon, everyone. Whether this is your first Small Business 

Forum or fortieth, I want to thank you for joining us today and over 

the course of the week. Planning any 40th event—whether a birthday, 

anniversary, or work milestone—engenders an element of nostalgia. 

If this were a birthday party, we might have a slideshow of childhood 

pictures and play top hits from the year of birth. In planning for this 

year’s 40th Small Business Forum, our team couldn’t help but think 

about the original Forum in 1982 and the events that precipitated it. 

So please humor me today as I paint the picture of then and now, photos and all. The good news 

for you: unlike a birthday party toast, this one will not trail on and on, leaving you wondering 

which cousin will take the mic from the loquacious uncle.30

A POLAROID SNAPSHOT OF 1982

Image Credits: The History Channel, Old Sports Cards, The Guardian

In 1982, the country was in the difficult days of the Cold War, Cal Ripken, Jr. played the first of 

his record-breaking 2,632 consecutive game streak, and Michael Jackson released Thriller, which 

went on to become the best-selling album of all time.
REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM | 31

Image Credits: Time Magazine, Pinterest, CNET, University of Utah

Technologically, the world was changing rapidly, epitomized by Time magazine naming 

the personal computer as its “Man of the Year.”31 This was the year that the market met 

technologies like the Commodore 64 home computer,32 compact discs (CDs),33 and the world’s 

first artificial heart.34

Image Credits: Forbes, Stacker, Federal Reserve History

Economically, the country was reeling from the 1980–82 recession, culminating in the Bear 

Market of 1982.35 The S&P bottomed out on August 12, 1982 at 102.42, and the country was 

grappling with over 10 percent unemployment.

Demographically, entrepreneurship and business ownership were beginning to change following 

legislation passed in the ’70s. The Equal Credit Opportunity Act of 1974 guaranteed women 

the right to get a credit card or obtain a loan separately from their spouse, opening the doors to 

women running their own businesses.36 A few years later, the Community Reinvestment Act of 

1977 required financial institutions to serve all segments of their communities, improving access 

to credit for minority entrepreneurs.37
32 | REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM

HITTING FAST FORWARD

Since 1982, quite a lot has changed. As the Time “Machine of the Year” awardee signaled, 

computer-based technology proliferated, fueled by the growth of venture capital in Silicon Valley.38

Fast forward a few years, in 1996, Congress responded to increasing national capital raising activity 

with the National Securities Markets Improvement Act (NSMIA) to promote more efficient capital 

formation, simplifying many aspects of pre-IPO capital raising.39

Six years later in 2002, as the public markets were reeling from corporate scandals, Congress 

passed the Sarbanes-Oxley Act to restore investor confidence in financial markets through increased 

requirements for independent auditors and public companies.40

Following the Great Recession in the late 2000s, the 2010 Dodd-Frank Wall Street Reform and 

Consumer Protection Act brought with it a flurry of 67 SEC rulemakings, dozens of studies and 

reports, and five new offices within the agency.41

Just two years later in 2012, Congress responded to declining numbers of small businesses and 

public offerings with the Jumpstart Our Business Startups (JOBS) Act, creating a new crowdfunding 

exemption, carving a pathway for general solicitation offerings sold to verified accredited investors, 

and encouraging more companies to go public as emerging growth companies.42

In between those landmark pieces of legislation, the Commission was busy responding to changes 

in our markets and updating our rules. And each year, you and other members of the public 

gathered to provide feedback to Congress and the Commission, helping us hone capital formation 

policy to meet the needs of entrepreneurs and their investors.

COMING FULL CIRCLE TO YEAR 40

Undeniably, a lot has changed in the 40 years since 1982. Our markets have grown, and 

“technology” has taken on a whole new meaning.

Yet, much remains the same. Albeit under 

different circumstances from the early 

’80s, today we are also looking at job 

losses and fundamental transformations of 

society, consumer behavior, and business 

operations in response to COVID-19. One 

thing remains constant: just as in 1982, 

we are again looking to entrepreneurs and 

their investors to lead the charge forward. 

Case in point: the technologies allowing 

us to meet virtually throughout this 

“Entrepreneurs and their investors are 

building the future in which we want 

to live, pushing into new frontiers 

with solutions we need. It is our 

job—the public and private sectors 

working together—to make sure that 

capital is inclusive, accessible, and 

scalable for these visionaries.”
REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM | 33

pandemic were built by entrepreneurs, and the vaccines allowing us to exit this pandemic were 

made possible by our capital markets. Entrepreneurs and their investors are building the future 

in which we want to live, pushing into new frontiers with solutions we need. It is our job—the 

public and private sectors working together—to make sure that capital is inclusive, accessible, 

and scalable for these visionaries. That requires access to capital for startups and angel investors 

honing their minimum viable product (MVP), for growth-oriented companies and venture 

investors scaling their business model, and for mature companies and public investors operating 

with a long-term vision.

Over the next four days of the Forum, we will hear from speakers on timely topics in capital 

raising, including:

» Monday: Finding Your First Dollars: Navigating Your Way to Raise Early Rounds

» Tuesday: Doing Your Diligence: How Savvy Early-Stage Investors Build Diversified 

Portfolios

» Wednesday: Diversifying Capital Allocators: Tools for Emerging and Smaller Funds 

and Their Managers

» Thursday: Small Cap Insights: Perspectives on Smaller Companies

Thank you to our team members for making this event happen: Amy Reischauer, Colin A. 

Caleb, Dean A. Brazier, Jr., Jenny J. Choi, Jenny Riegel, Jessica W. McKinney, Julie Zelman 

Davis, Kristene Blake, Malika Sullivan, Sebastian Gomez Abero, and Todd VanLaere, as well 

as our colleagues across the agency for bringing this virtual event to life, including the Office 

of Public Affairs, Office of Information Technology, Office of the General Counsel, Office of 

Minority and Women Inclusion, Office of Investor Education and Advocacy, and our colleagues 

in the different rulemaking divisions.

We are looking to you to help us shape the future of capital raising. Cheers to 40 years of using 

your voice to positively impact change, and to many more!
34 | REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM

REMARKS OF SEC CHAIR GARY GENSLER

Thank you, Martha, for that kind introduction, and for inviting me 

to join you today. I’m glad to be here today to help kick off the 40th 

Annual Small Business Forum. 

I’m always thinking about working families and the way that the 

SEC’s three-part mission serves them. America’s small businesses are a 

core part of America’s economic foundation. 

I think often about the important role small businesses play in our economy. As of 2019, small 

businesses accounted for two-thirds of new jobs and 44 percent of economic activity, according to 

the Small Business Administration. 

Further, every large business was once a small business. 

The capital markets that the SEC oversees also play an integral role to small businesses. Some 

access the capital markets directly when they go public or raise money from private funds. Others 

tap into the capital markets indirectly through their mortgages or borrowings that they take out 

through financial institutions that are accessing the capital markets. 

One might say small businesses are in my blood as well. My grandparents ran small businesses. 

In other words, my mom grew up above her family’s business—a quintessential corner grocery 

store—and my dads’ parents had a bar. 

My father, Sam, was the first of his parents’ children to be born in America. Family lore has it that 

he was named after Uncle Sam. 

When he was in high school, a shop teacher noticed that he was a good mechanic. To earn a little 

pocket change, he started working on pinball machines after school. 

Today, I know you’ll be discussing how small businesses find their first dollars. In my dad’s case, 

he never went to college, but he used his mustering-out pay from World War II to buy used 

vending machines, fix them up, and build the family business. 
REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM | 35

My dad’s company remained small—it 

never got to more than 35 people. Though 

he never directly accessed the capital 

markets, the banks he borrowed from 

probably did. The 400 locations where 

he had vending machines—those were 

small businesses too, mostly bars. The 

ownership of these places was as diverse as 

you can imagine.

That’s why I’ve long believed that all 

business owners deserve access to our 

capital markets to fund their entrepreneurial ideas and innovations, regardless of their race, gender, 

geography, or any other factor. I know that’s a key part of this Office’s work.

I look forward to your recommendations on those issues and broader questions of how the SEC 

can facilitate capital formation for small businesses.

I thank you for representing the interests of small businesses in America and look forward to 

hearing more about that work going forward. 

Thank you.

“That’s why I’ve long believed that 

all business owners deserve access 

to our capital markets to fund their 

entrepreneurial ideas and innovations, 

regardless of their race, gender, 

geography, or any other factor. I know 

that’s a key part of this Office’s work.”
36 | REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM

REMARKS OF SEC COMMISSIONER HESTER M. PEIRCE

Thank you, Martha [Miller]. I am pleased to be here on the first 

day of our fortieth annual Government-Business Forum on Small 

Business Capital Formation. These events are a wonderful opportunity 

to bring people together to discuss the nuts and bolts of capital 

formation, a topic of heightened importance this year as the economy 

begins the long transition back from virtual to in-person. With that 

transition, we hope that small businesses that have held on through 

the pandemic will regain momentum. We also look forward to seeing 

new businesses, the brainchildren of entrepreneurs stuck at home during the pandemic, get off to a 

strong start.

One of the few upsides of the past year was that people got a chance to spend time doing things 

they might not otherwise have done. I have been a bread baker for as long as I can remember, so 

I enjoyed watching others embrace my hobby during the pandemic. I particularly admire those 

who have taken on the challenge of making sourdough bread. My experience with sourdough 

starter was short-lived. In law school, I shared an apartment and a very small refrigerator with two 

roommates. Rather than studying the law, I focused on learning to make sourdough bread. I made 

my own starter, which I stored in a yogurt container in the fridge. One morning, a distressed call 

from one of my roommates alerted me to the unfortunate fact that the starter, overly alive, had 

popped the lid on the yogurt container and spread itself all over everything in the fridge. Bad for 

roommate relations, but probably good in the long-run: I ditched the sourdough experiment and 

turned back to my legal studies. A week ago, however, a friend gave me a new batch of sourdough 

starter, so the experiment is about to begin afresh.

Not surprisingly, in my mind and likely I am not “A successful business, the first to think of this, sourdough starter has 

parallels with capital formation. You have to find appropriately fed with 

the first dollars—your starter money. Maybe you capital, can be the seed from create it yourself from your own savings or personal 

borrowing. Often this early money comes from people which many other businesses 

you know. That initial capital breeds more capital, in the founder’s community but, to keep the business alive, you have to feed it with 

fresh capital, much like an aspiring baker has to feed grow and prosper.”

sourdough starter with flour on a regular basis. Just 

as my friend gave me some of her starter along with 

some advice about how to use it, a founder, over time, may be able to take some of the money she 

pulls out of the business and pass it along to other people, a chain that then continues. A successful 

business, appropriately fed with capital, can be the seed from which many other businesses in the 

founder’s community grow and prosper.
REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM | 37

Both new and existing businesses need capital, and the discussions over the next several days 

will help us to think about what we at the Commission can do to facilitate capital formation. 

I anticipate that some of these recommendations, having been discussed at the Forum or 

elsewhere, will not be new. I hope to hear the thoughts of Forum participants on the following 

and other ideas:

» Accredited Investors: We laid the groundwork last year for allowing people to qualify 

as accredited investors based on sophistication proved not by wealth or income, but by 

education, examination, or experience.43 We need to build on this foundation, so people 

should be coming to us with suggestions of educational credentials, examinations, or 

professional certifications and designations that should serve as the basis for accreditation.

» Finders: A Forum favorite in many of its forty years, a regulatory framework for finders—

people who periodically introduce investors to small businesses in need of capital—would 

establish some much-needed parameters for this activity. We proposed an exemption last 

year.44 We should finalize it or, as Commissioner Lee suggested, propose a rule for finders.45

» Micro-Offering Exemption: To make it easier for small businesses to locate early money, 

we should create a streamlined exemption to allow small businesses to raise $250,000 to 

$500,000 subject to the antifraud provisions of the securities laws and a requirement to 

notify the SEC of reliance on the exemption.

» Crowdfunding: Crowdfunding seems to have been relied upon more during the pandemic 

in part, perhaps, because of temporary relief we provided from certain crowdfunding 

requirements.46 Recent permanent amendments to the crowdfunding rules also are now in 

effect, which should further spur the use of this capital raising tool.47 We should consider 

whether any of the temporary relief should be made permanent and whether other changes 

would make crowdfunding more viable as a source of capital for small businesses. 

» Modify Qualifying Venture Capital Fund Exemption under Section 3(c)(1): We should 

evaluate increasing the cap from $10 million to $150 million and increasing the allowable 

number of investors from 250 to 600, as recommended by the SEC Small Business Capital 

Formation Advisory Committee last week.48

» Expand the Scope of Qualifying Investments for Venture Capital Funds: Again, the Small 

Business Capital Formation Advisory Committee made a recommendation along these lines 

last week, but revisiting what constitutes a qualifying investment could make it easier for 

venture capital funds to support small businesses.49

Thank you to everyone who will participate in the Forum. As important as the upcoming days will 

be, small business capital formation deserves our continued attention. My door is always open for 

anyone who wants to talk about these issues throughout the year. Maybe I will even have some 

sourdough bread on hand for visitors to sample.
38 | REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM

REMARKS OF SEC COMMISSIONER ELAD L. ROISMAN

I’m pleased to welcome you to Day 2 of the 40th Annual SEC 

Small Business Forum. While we are all looking forward to the day 

we can hold such events in person again, I hope that this format 

enables more people to attend without the cost or hassle of travel to 

us here in Washington.

Regardless of our location, I must still give my disclaimer which is 

that my remarks reflect my views alone and not necessarily the views 

of the Commission or my fellow commissioners.

The fact that this forum has convened now for four decades speaks to the evergreen nature of 

small issuer and investor concerns. Although we at the SEC have made some strides towards 

increasing our awareness of and focus on this important group, not least of which has been 

selecting our first advocate for small business capital formation, Martha Legg Miller, there is 

clearly still work to be done.

As an SEC commissioner, my duty is to promote and further the SEC’s mission which includes 

facilitating capital formation. At an absolute minimum, this means that I must ensure that our 

rules do not unduly and unjustly prevent capital 

formation. I worry, however, that many of our existing “The fact that this forum rules do exactly that. At a recent meeting of the SEC’s 

Small Business Capital Formal Advisory Committee, has convened now for 

the committee members took up for the second time four decades speaks to the the concerns of underrepresented founders.

evergreen nature of small 

The message that comes through loud and clear is that 

founders get funded by their networks and regulatory issuer and investor concerns.”

barriers that prevent founders from obtaining capital 

from their existing networks may result in those ideas not getting off the ground. That is, if we are 

concerned, and I am, that the difference between a good idea getting funded or not getting funded 

is the difference between whether a person has friends who are wealthy are not, we need to look at 

how we can open up investment opportunities to more communities throughout our country.
REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM | 39

Capital raising is obviously of interest to founders and small business owners, but investment 

opportunity also effects would-be investors. For years, it has been clear that one of the greatest 

opportunities for wealth building has been in the private markets. Many nonpublic companies 

have been growing in value and are going public or have not gone public at all. When we look at 

underrepresented groups, we must also look at the networks of would-be investors and whether 

we are unjustly preventing many Americans from building the kind of wealth that establishes 

intergenerational stability and a firm footing in the middle and upper class.

I also have a duty to protect investors. And I have no interest in tearing down valuable protections. 

I do however have a strong interest in finding ways to ensure our markets are not only deep, 

liquid, and transparent, but also inclusive in the opportunities they provide. This may mean 

expanding the definition of accredited investor opening the way for the development of funds 

that would permit retail investors to invest alongside and on equal terms with institutional or 

accredited investors or other structures we have not yet considered.

I know many of you are in the trenches dealing with these questions of how to fund your 

businesses and how to reach more investors. My door, virtually for now, is open, and I welcome 

any insights you can provide.

Thank you for being with us today. I hope we can work together to solve some of these evergreen 

problems, especially as small businesses recover from the difficulties of the last year.
40 | REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM

REMARKS OF SEC COMMISSIONER ALLISON HERREN LEE

Good afternoon. I’m pleased to join for you for the 40th Annual Small 

Business Forum. I want to begin by thanking the staff in the Office of 

the Advocate for Small Business Capital Formation for your efforts in 

putting this event together.

Martha, I believe this is the third time your office has hosted the 

forum, and we’ve had to contend with pandemic conditions now for 

two of those three forums. You and your staff have, not surprisingly, 

made sure that the quality of the event didn’t suffer, and if anything, you’ve taken the opportunity 

to innovate and enhance the format. Thank you for your efforts.

Notwithstanding how successful this event has been in a virtual setting, I am hopeful that we can 

come together in person for next year’s event. I would really welcome the opportunity to sit down 

and talk with all of you face to face.

In addition to the staff, I want to thank today’s speakers and participants for contributing their 

time and expertise. I look forward to this event each year in part because of the emphasis on 

collaboration. For one thing, it provides us with an opportunity to deepen our engagement with 

the small business community. But our statutory mandate also requires that we invite other 

regulators. And this calls on the Commission to think about the broader regulatory landscape and 

how we can learn from one another and work together with our regulatory partners to promote 

capital formation and investment opportunity while protecting investors.

I also appreciate that the event furnishes an opportunity for us to reflect on our progress since 

the previous year’s forum. Last year, we were in the early months of adjusting and responding to 

the pandemic and still evaluating its implications for small business. Now, one year later, we’re 

beginning to emerge from the pandemic conditions, and we can look back on an ambitious year 

of regulatory changes, many of which were responsive to the recommendations coming out of last 

year’s forum.

Among other things, last year, the Commission amended the accredited investor definition 

to provide for additional avenues to qualify. We raised offering limits for Regulation A and 

Regulation Crowdfunding offerings. We relaxed certain disclosure requirements under Regulation 

D, and we extended certain relief that was granted on a temporary basis to crowdfunding issuers 

for an additional 18 months. This is by no means a complete list either of our rulemaking in the 

last year or even our rulemaking affecting the exempt offering framework. But it’s notable both for 

the sheer volume of policy work done by the Commission staff in challenging circumstances and 

also for the focus on the private markets.
REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM | 41

So as we look ahead, having made a tremendous number of changes designed to open up access 

to private investment opportunities, I ask you to consider the corresponding investor protections 

that may be appropriate to help ensure that investors in the private markets can assess and bear 

the risks of those investments and to increase 

investor confidence in those markets. “So as we look ahead having made 

For instance, now that we’ve opened the a tremendous number of changes 

door to alternative methods for qualifying as designed to open up access to private an accredited investor, shouldn’t we consider 

how to ensure that the financial thresholds investment opportunities, I ask 

in the accredited investor definition, which you to consider the corresponding are still the principal investor protection 

in this space, don’t continue to erode in investor protections that may be 

effectiveness? Specifically, shouldn’t we appropriate to help ensure that consider whether those thresholds, which 

have been unchanged since 1983, should investors in the private markets can 

be updated and indexed to inflation going assess and bear the risks of those forward. After all, what is the sense of 

having financial thresholds if there is no investments and to increase investor 

mechanism to make adjustments to account 

for the passage of time? confidence in those markets.”

I also note that last year’s forum included a particular focus on underrepresented founders. The 

emphasis on women- and minority-owned businesses has continued throughout this year and 

resulted in helpful recommendations from both the Small Business Capital Formation Advisory 

Committee and the Investor Advisory Committee. These recommendations are focused on 

increasing investment and capital formation opportunities for diverse founders and investors. But 

we still need your insight to better understand how to translate those broad recommendations 

into action and how we can tailor policy changes to address the specific challenges faced by 

underrepresented communities. 

I hope that you’ll keep that in mind as you think through your recommendations during the 

course of the forum. And again, I want to thank you all for your time, and I look forward to 

your recommendations.
42 | REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM

REMARKS OF SEC COMMISSIONER CAROLINE A. CRENSHAW

Good afternoon! Thank you, Martha [Miller], for the warm 

introduction. It is wonderful to be here. I have truly enjoyed 

hearing from all of the panelists over the last several days. And 

I am particularly interested in today’s discussion focused on smaller 

public companies.

You may not know this about me, but I am the proud sister of 

an entrepreneur. My brother started his own business before the 

pandemic—and he is everything from the chief executive and chief financial officer to the IT and 

customer service departments to the expert on intellectual property issues. I know how challenging 

it is to start and run your own business. I also know successful small businesses are critical to our 

economy. In 2019, the Small Business Administration noted that small businesses were responsible 

for over 40 percent of U.S. economic activity.50 Small businesses accounted for more than 60 

percent of new private sector jobs from 2005 to 2019.51

Because small businesses are so “Because small businesses are so 

important to the health of our economy, 

it is critical that the Commission and important to the health of our economy, 

its staff hear from small business it is critical that the Commission and 

owners, investors, and advisers about 

their experiences. We need your input its staff hear from small business 

on what is working and what is not. owners, investors, and advisers about We need your ideas about regulatory 

changes that could promote greater their experiences. We need your input 

equity in capital access. We need your on what is working and what is not. feedback about the process for initial 

public offerings. And we need you to We need your ideas about regulatory 

tell us about any other issues facing changes that could promote greater smaller public companies today, and the 

potential regulatory changes that could equity in capital access.”

help them continue to grow and succeed.

In past forums and discussions on this topic, we have heard that there is a need to promote 

greater liquidity in secondary trading markets for securities of smaller public companies. I’m very 

interested in hearing whether market structure changes could help address liquidity issues and 

encourage greater investment in these companies. In 2019, the Commission issued a statement 

noting that concurrent trading of securities on multiple exchanges may be limiting liquidity for 

smaller public company stocks.52 Would suspending unlisted trading privileges for these companies 

facilitate greater liquidity?
REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM | 43

Prior small business forums have also addressed the 40-year-old regulatory framework for transfer 

agents—the entities that facilitate the transfer, issuance, and cancellation of securities. Would a 

modernized regulatory framework allow smaller public companies, other issuers, and investors 

to work with transfer agents more effectively? If so, what disclosure requirements and internal 

controls are needed in today’s markets?

Finally, are there proxy process improvements that could create efficiencies for smaller public 

companies and their investors? I could continue to pose questions but you have a lot on the agenda 

today and I don’t want to stand in the way. Thank you all for being here and for allowing me to 

give opening remarks. I’m looking forward to today’s discussion.
44 | REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM

 ABOUT THE OFFICE OF THE ADVOCATE FOR 

 SMALL BUSINESS CAPITAL FORMATION

The SEC’s Small Business Advocacy Office advocates for solutions to address challenges faced by small 

businesses and their investors raising and deploying capital. “Small business” for the Office spans from 

early-stage start-ups raising seed capital, to later-stage private companies whose founders and investors 

are seeking liquidity in the public markets, all the way to smaller public companies. Congress established 

the Office via the bipartisan SEC Small Business Advocate Act of 2016 as an independent office within 

the SEC that reports to the entire Commission as well as to multiple committees of Congress.

Meet the Team

MARTHA 

LEGG MILLER

COLIN A. 

CALEB

SEBASTIAN 

GOMEZ ABERO

DEAN A. 

BRAZIER, JR.

JULIE ZELMAN 

DAVIS

JESSICA W. 

MCKINNEY

JENNY J. 

CHOI

SARAH

KENYON

JENNY 

RIEGEL

TODD 

VANLAERE

MALIKA 

SULLIVAN

AMY 

REISCHAUER

Engage with Us!

Reach out to the team to share your perspectives on capital raising:

smallbusiness@sec.gov

202-551-5407

www.SEC.gov/oasb
REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM | 45

 ENDNOTES

1 The SEC conducts the Forum annually and prepares

this report in accordance with the Small Business 

Investment Incentive Act of 1980 [15 U.S.C. 80c-1 

(codifying section 503 of Pub. L. No. 96-477, 94 

Stat. 2275 (1980))].

2 The SEC responds to the Forum recommendations

pursuant to the Small Business Investment Incentive 

Act of 1980, as amended by the Economic Growth, 

Regulatory Relief and Consumer Protection Act of 

2018. 15 U.S.C. 80c-1. Section 503 of the Economic 

Growth, Regulatory Relief and Consumer Protection 

Act of 2018 [Pub. L. 115- 174, 132 Stat. 1296 (2018)] 

amended Section 503 of the Small Business Investment 

Incentive Act of 1980 to add this requirement in 

new paragraph (e). The responses do not include any 

Commission initiatives that are not yet public. Where 

a Forum recommendation relates to an initiative as 

to which the Commission has solicited or expects to 

solicit public comment, the recommendation will be 

considered as part of that initiative, along with other 

comments received.

3 Participants voluntarily submitted the presented

information in connection with their registration 

online. The report solely includes submitted data, 

without inclusion of non-responses.

4 See Facilitating Capital Formation and Expanding 

Investment Opportunities by Improving Access to 

Capital in Private Markets, Release No. 33-10884 ; 

34-90300; IC-34082 (Nov. 2, 2020), at https://www.

sec.gov/rules/final/2020/33-10884.pdf.

5 See Concept Release on Harmonization of Securities 

Offering Exemptions, Release Nos. 33-10649; 

34-86129; IA-5256; IC-33512 (Jun. 18, 2019), at 

https://www.sec.gov/rules/concept/2019/33-10649.pdf.

6 See Facilitating Capital Formation and Expanding 

Investment Opportunities by Improving Access to 

Capital in Private Markets, Release Nos. 33-10763; 

34-88321 (Mar. 4, 2020), at https://www.sec.gov/

rules/proposed/2020/33-10763.pdf.

7 The term “security” is defined in Section 2(a)(1) of

the Securities Act, Section 3(a)(10) of the Securities 

Exchange Act of 1934 (Exchange Act), Section 2(a)

(36) of the Investment Company Act of 1940 (1940 

Act), and Section 202(a)(18) of the Investment 

Advisers Act of 1940 (Advisers Act). The term 

“security” includes an “investment contract,” as 

well as other instruments such as stocks, bonds, and 

transferable shares. A digital asset should be analyzed 

to determine whether it has the characteristics of any 

product that meets the definition of “security” under 

the federal securities laws. The fact that the instrument 

or investment is represented in digital form, or that a 

particular technology is used to effectuate its offer or 

sale, does not change that analysis.

Both the Commission and the federal courts

frequently use the “investment contract” analysis to 

determine whether unique or novel instruments or 

arrangements, such as digital assets, are securities 

subject to the federal securities laws. Whether offers 

and sales of a digital asset are securities transactions 

depends on the specific facts and circumstances. The 

U.S. Supreme Court’s Howey case and subsequent 

case law have found that an “investment contract” 

exists when there is the investment of money in a 

common enterprise with a reasonable expectation of 

profits to be derived from the efforts of others. SEC 

v. W.J. Howey Co., 328 U.S. 293 (1946) (Howey). 

See also United Housing Found., Inc. v. Forman, 421 

U.S. 837 (1975); Tcherepnin v. Knight, 389 U.S. 332 

(1967); SEC v. C. M. Joiner Leasing Corp., 320 U.S. 

344 (1943). The so-called “Howey test” applies to 

any contract, scheme, or transaction, regardless of 

whether it has any of the characteristics of typical 

securities such as equity or debt securities. The focus 

of the Howey analysis is not only on the form and 

terms of the instrument itself (in this case, the digital 

asset) but also on the circumstances surrounding the 

digital asset and the manner in which it is offered, 

sold, or resold (which includes secondary market 

sales). See, e.g., Gary Plastic Packaging Corp. v. 

Merrill Lynch, Pierce Fenner & Smith, 756 F.2d 230 

(2d Cir. 1985).

8 See Report of Investigation Pursuant to Section 21(a) 

of the Securities Exchange Act of 1934: The DAO 

(Exchange Act Rel. No. 81207) (Jul. 25, 2017), at 

https://www.sec.gov/litigation/investreport/34-81207.

pdf.

9 See https://www.sec.gov/corpfin/frameworkinvestment-contract-analysis-digital-assets.

10 Engage with SEC’s FinHub staff by visiting http://

www.sec.gov/finhub.

11 See Amending the “Accredited Investor” Definition, 

Release No. 33-10824; 34-89669 (Aug. 26, 2020), at 

https://www.sec.gov/rules/final/2020/33-10824.pdf.

12 See Order Designating Certain Professional Licenses 

as Qualifying Natural Persons for Accredited Investor 

Status, Release No. 33-10823 (Aug. 26 2020), at 

https://www.sec.gov/rules/other/2020/33-10823.pdf.
46 | REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM

13 See, e.g., Recommendations of the Diversity and 

Inclusion Subcommittee of the Asset Management 

Advisory Committee (Jul. 7, 2021), at https://

www.sec.gov/files/amac-recommendations-disubcommittee-070721.pdf and Recommendations 

of the SEC’s Small Business Capital Formation 

Advisory Committee regarding Retail Investor Access 

to Registered Closed-End Funds Investing in Private 

Funds (Nov. 12, 2019), at https://www.sec.gov/

spotlight/sbcfac/recommendation-closed-end-fund-offunds.pdf.

14 See Recommendations of the SEC’s Small Business 

Capital Formation Advisory Committee regarding 

Encouraging Small, Regional Funds (Apr. 30, 2021), 

at https://www.sec.gov/spotlight/sbcfac/encouragingsmall-regional-funds-043021.pdf.

15 The 1940 Act generally requires the Commission to

index the $10 million cap for inflation, rounded to 

the nearest $1 million, every five years. See 1940 Act, 

Section 3(c)(1)(C).

16 See Cutting Through the Jargon (updated May 25, 

2021), at https://www.sec.gov/cutting-through-theJargon.

17 See Advisers Act, Section 203(l). 

18 See Exemptions for Advisers to Venture Capital 

Funds, Private Fund Advisers With Less Than $150 

Million in Assets Under Management, and Foreign 

Private Advisers, IA-3222 (Jul. 6, 2011), at pp. 23-27.

19 See Guidance on the Exemption for Advisers to 

Venture Capital Funds, No. 2013-13 (Dec. 2013), at 

https://www.sec.gov/divisions/investment/guidance/

im-guidance-2013-13.pdf. 

20 See Recommendations of the SEC’s Small Business 

Capital Formation Advisory Committee regarding 

Underrepresented Founders and Investors (Aug. 

4, 2020), at https://www.sec.gov/spotlight/sbcfac/

underrepresented-founders-recommendation.pdf, and 

Encouraging Small, Regional Funds (Apr. 30, 2021), 

at https://www.sec.gov/spotlight/sbcfac/encouragingsmall-regional-funds-043021.pdf.

21 See Recommendations of the SEC’s Investor Advisory 

Committee regarding Minority and Underserved 

Inclusion in Investment and Financial Services (Mar. 

11, 2021), at https://www.sec.gov/spotlight/investoradvisory-committee-2012/20210311-minority-andunderserved-inclusion-recommendation.pdf. 

22 See Asset Management Advisory Committee Spotlight 

page, at https://www.sec.gov/page/asset-managementadvisory-committee.

23 See Securities Industry and Financial Markets 

Association (SIFMA), SEC Staff No-Action Letter 

(Oct. 26, 2017), at https://www.sec.gov/divisions/

investment/noaction/2017/sifma-102617-202a.htm; 

Investment Company Institute, SEC Staff No-Action 

Letter (Oct. 26, 2017), at https://www.sec.gov/

divisions/investment/noaction/2017/ici-102617-17d1.

htm; SIFMA Asset Management Group, SEC Staff 

No-Action Letter (Oct. 26, 2017), at https://www.sec.

gov/divisions/marketreg/mr-noaction/2017/sifma-amg102617-28e.pdf.

24 See SIFMA, SEC Staff No-Action Letter (Nov. 4, 

2019), at https://www.sec.gov/investment/SIFMA110419.

25 See Rule 12b-2.

26 See, e.g., Division of Economic and Risk Analysis Staff 

Report Short Sale Position and Transaction Reporting, 

(Jun. 5, 2014), at https://www.sec.gov/files/short-saleposition-and-transaction-reporting%2C0.pdf. 

27 See Commission Statement on Market Structure 

Innovation for Thinly Traded Securities, Release No. 

34-87327 (Oct. 17, 2019), at https://www.sec.gov/

rules/policy/2019/34-87327.pdf.

28 See Office of Information and Regulatory Affairs, 

Office of Management and Budget, U.S. Securities and Exchange Commission Agency Rule List 

(Spring 2021), at https://www.reginfo.gov/public/

do/eAgendaMain?operation=OPERATION_GET_

AGENCY_RULE_LIST¤tPub=true&agencyCode=&showStage=active&agencyCd=3235. 

29 The SEC’s Small Business Advocacy team convenes 

the advisory planning group to participate in Forum 

planning pursuant to 15 U.S.C. 80c-1(b).

30 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.

31 This edition marked the first time the magazine

awarded “Man of the Year” (which it later changed 

to “Person of the Year”) to a non-human. See http://

content.time.com/time/covers/0,16641,19830103,00.

html.

32 See Commodore 64, Wikipedia, (May 17, 2021), at 

https://en.wikipedia.org/wiki/Commodore_64.

33 See Ryan Waniata, The Life and Times of the Late, 

Great CD. Remembering the rise (and final fall) of the 

late, great Compact Disc, digitaltrends, (Feb. 7, 2018), 

at https://www.digitaltrends.com/features/the-historyof-the-cds-rise-and-fall/.
REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM | 47

34 Robert Jarvik, MD on the Jarvik-7, Jarvik Heart,

(2018), at https://www.jarvikheart.com/history/robertjarvik-on-the-jarvik-7/.

35 See David John Marotta, Volker’s Bear: The Bear 

Market Of 1982, Forbes, (Oct. 11, 2017), at https://

www.forbes.com/sites/davidmarotta/2017/10/11/

volkers-bear-the-bear-market-of-1982/.

36 See Carol Tice, The American Business Revolution, 

Entrepreneur, (Apr. 18, 2007), at https://www.

entrepreneur.com/article/177302.

37 Id.

38 Venture capital, Wikipedia, (May 19, 2021), at https://

en.wikipedia.org/wiki/Venture_capital#1980s.

39 See ABA Business Law Section, National Securities 

Markets Improvement Act of 1996, American 

Bar Association, (May 14, 2020), at https://www.

americanbar.org/groups/business_law/publications/

the_business_lawyer/find_by_subject/buslaw_tbl_mci_

nsmia/.

40 The Laws That Govern the Securities Industry, 

U.S. Securities & Exchange Commission, Investor.

gov, (May 19, 2021), at https://www.investor.gov/

introduction-investing/investing-basics/role-sec/lawsgovern-securities-industry.

41 Implementing the Dodd-Frank Wall Street Reform 

and Consumer Protection Act, U.S. Securities & 

Exchange Commission, (Dec. 23, 2020), at https://

www.sec.gov/spotlight/dodd-frank.shtml.

42 See supra note 11.

43 See Accredited Investor Definition, Release Nos. 

33-10824; 34-89669 (Oct. 9, 2020), at https://www.

sec.gov/rules/final/2020/33-10824.pdf. Requests 

for Commission consideration, which must address 

how a particular certification, designation, or 

credential satisfies the nonexclusive list of attributes 

set forth in the new rule, may be submitted at 

investorcredentials@sec.gov.

44 See Notice of Proposed Exemptive Order Granting 

Conditional Exemption from the Broker Registration 

Requirements of Section 15(a) of the Securities 

Exchange Act of 1934 for Certain Activities of 

Finders, Release No. 34-90112 (Oct. 13, 2020), at 

https://www.sec.gov/rules/exorders/2020/34-90112.

pdf.

45 Public Statement, Commissioner Allison Herren Lee,

Regulating in the Dark: What We Don’t Know About 

Finders Can Hurt Us, (Oct. 7, 2020), at https://www.

sec.gov/news/public-statement/lee-proposed-findersexemption-2020-10-07.

46 See Temporary Amendments to Regulation 

Crowdfunding, Release No. 33-10781 (May 7, 2020), 

at https://www.sec.gov/rules/interim/2020/33-10781.

pdf; Temporary Amendments to Regulation 

Crowdfunding; Extension, Release No. 33-10829 

(Sep. 2, 2020), at https://www.sec.gov/rules/

interim/2020/33-10829.pdf.

47 See Facilitating Capital Formation and Expanding 

Investment Opportunities by Improving Access to 

Capital in Private Markets, Release Nos. 33-10884; 

34-90300; IC-34082 (Jan. 14, 2021), at https://www.

sec.gov/rules/final/2020/33-10884.pdf.

48 See Recommendations from SEC Small Business 

Capital Formation Advisory Committee (Apr. 30, 

2021), at https://www.sec.gov/spotlight/sbcfac/

encouraging-small-regional-funds-043021.pdf.

49 Id.

50 See Press Release, Small Businesses Generate 44 

Percent of U.S. Economic Activity, U.S. Small Business 

Administration Office of Advocacy (Jan. 30, 2019), at 

https://advocacy.sba.gov/2019/01/30/small-businessesgenerate-44-percent-of-u-s-economic-activity/.

51 See Report, Small Business Administration and Job 

Creation, Congressional Research Service, at 8 (Jun. 

15, 2020), at https://fas.org/sgp/crs/misc/R41523.pdf.

52 The 2019 statement was issued with the intention of

encouraging market innovations that could improve 

liquidity for securities traded in lower volume. 

The Commission expressed interest in potential 

market structure innovations that included “the 

potential suspension or termination of UTP and/or 

the possibility of exemptive relief from Regulation 

NMS and other rules under the Exchange Act.” 

See Commission Statement on Market Structure 

Innovation for Thinly Traded Securities, Rel. No. 

34-87327, at 5 (Oct. 17, 2019), at https://www.sec.

gov/rules/policy/2019/34-87327.pdf; see also Division 

of Trading and Markets: Background Paper on the 

Market Structure for Thinly Traded Securities (Oct. 

17, 2019), at https://www.sec.gov/rules/policy/2019/

thinly-traded-securities-tm-background-paper.pdf.
48 | REPORT OF THE 40TH ANNUAL SEC SMALL BUSINESS FORUM

U.S. SECURITIES AND EXCHANGE COMMISSION