While small and early-stage businesses often begin as start-ups funded with the help of friends and family, achieving “real success” often outstrips those friends’ and families’ available capital, said SEC Chairman Gary Gensler. “That’s why alternative methods of capital raising can play such a critical role” in the growth of small business, he added.
Addressing the SEC’s Small Business Capital Formation Advisory Committee ahead of its Monday meeting, Gensler noted angel investing and crowdfunding are two such alternatives that have played key roles in the development of vibrant private markets alongside public markets. Further, “I believe the U.S. economy has benefitted from capital formation in both the private and public markets,” he said.