- The Advocate for Small Business Capital Formation at the Securities and Exchange Commission spotlights two tools that help simplify the process of raising capital
- A glossary helps cut through the jargon of capital raising, while a beta launched navigator tool helps entrepreneurs find financing based on their own circumstances
- The official also highlighted other trends and misconceptions in entrepreneurialism and raising capital
Summary by Dirk Langeveld
The Advocate for Small Business Capital Formation at the Securities and Exchange Commission recently spotlighted two tools designed to simplify the process of capital access for entrepreneurs.
Appearing at The SEC Speaks in 2021 event, Martha Miller said that access to financing is still a challenge for startup companies despite headlines showing an increase in investor capital. She said the SEC has introduced a “Cutting Through the Jargon” glossary to simplify the language commonly used in raising capital, and has beta launched the Capital Raising Navigator to help entrepreneurs narrow their financing options based on their own needs and circumstances.
Miller also addressed a number of other trends and misconceptions in capital raising, including:
- While there is a perception that entrepreneurs must fully commit to a startup for it to succeed, those who balance it alongside their full-time job can maintain better financial stability and are one-third less likely to fail
- Crossover investors who put money into pre-IPO companies are gaining clout, representing just 5.3 percent of venture deals but 36 percent of venture deal values; the median value of investments without crossover investors is $3 million, and $60 million for those with crossover investors
- Early innovators can break ground in new markets, but aren’t always the most successful; they’re more likely to fail than follow-up entrants, and tend to capture a smaller market share