Capital Formation

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Last week, SIFMA released its annual Capital Markets Fact Book, which reports comprehensive data on capital markets activity generally.  The U.S. equity markets represent 42.6% of the $115 trillion global equity markets, with the second largest market, the EU, accounting for 11%.  U.S. ECM activity saw an increase of 39.9% year-over-year, with $139.1 billion raised…

The PIPE market has proven to be resilient during times of stress.  In 2023, issuers raised over $33.8 billion in 809 PIPE transactions according to PrivateRaise.  This is considerably less than in 2021 during which issuers raised over $108.8 billion.  However, PIPE transaction activity has accelerated during the first five months of 2024.  Between…

Introduced under Title III of the JOBS Act, Regulation Crowdfunding (“Regulation CF”) was promulgated to allow startups and emerging companies to raise capital from a wider pool of investors through equity crowdfunding platforms.  Regulation Crowdfunding allows non-accredited investors to invest through these platforms.  Currently, a company may raise up to $5 million in a 12-month…

Not long ago, the SEC hosted the Annual Small Business Forum.  The Forum provides an opportunity to consider a broad array of issues affecting private companies as well as smaller public companies seeking to raise capital and allows the public an opportunity to comment and suggest policy recommendations.  In the last few years, the SEC…

The Securities and Exchange Commission announced that on February 27, 2024, the Small Business Capital Formation Advisory Committee will hold a meeting, which will be webcast. The SEC Office of the Advocate for Small Business Capital Formation will provide an overview of its 2023 report, about which we previously blogged. The Committee will then…

The Securities and Exchange Commission recently published its report on the Government-Business Forum on Small Business Capital Formation, which generates recommendations from participants that the SEC considers. The recommendations from participants included, among others, the following:

  • Expand the accredited investor definition
    • …

    The Securities and Exchange Commission recently an announced an upcoming meeting to be held on September 19, 2023.  The agenda includes a discussion with the SEC’s Division of Corporation Finance relating to its role in capital formation.  There have not been any recent SEC proposed rulemakings related to this area recently.  However, the agenda does…

    In early June, the US House of Representatives passed two sets of bills focused on promoting capital formation. The bipartisan effort included bills that amend the accredited investor definition in order to increase the diversity of investors participating in the private markets. In addition, as the IPO market continues to suffer, the packages include bills that would…

    On May 9, 2023, FINRA issued Regulatory Notice 23-09 (the “Notice”), seeking comment on any modifications that could be made to FINRA’s rules, operations and administrative processes to further promote capital formation while maintaining investor protection.

    In addition to the open-ended request, the Notice sets forth the following ten questions for commenters to consider: 

    • Are
    …

    The Securities and Exchange Commission’s Office of the Investor Advocate held the 42nd Annual Small Business Forum—this time convening panels over four days on various topics, including trends and challenges affecting early stage businesses, smaller funds, and accessing the public markets and raising capital by smaller public companies.  The Small Business Forum also solicits…