SEC Issues Report on Minority, Women Activity Under Reg CF

The Securities and Exchange Commission, Office of the Advocate for  Small Business Capital Formation, has posted a report on minotry and women activity in the Reg CF securities crowdfunding sector. Reg CF is one of the exemptions that enables online capital formation as well as holding the lowest offering cap.

The data, Entitled Women and Minority-Owned Businesses in Regulation Crowdfunding, will be discussed at the Small Business Capital Formation Advisory Committee (SBCFAC) meeting next week. It was authored by Melody Chang, Ph.D., of the University of Southern California Marshall School of Business.

 The goal of the report is to highlight women and minority participation in the Reg CF ecosystem. The report states:

“When considering all individual entrepreneurs participating in Reg CF, the proportion of women increased from 17.3 percent in 2016 to 22.5 percent in 2022. The proportion of White entrepreneurs decreased from 83.4 percent in 2016 to 73.0 percent in 2022, while the proportions of Asian, Black, and Hispanic entrepreneurs all increased over time.”

The data considered only goes to 2022.

As has been previously reported, gleaned from other research, the report states:

“Overall, women and minorities appear to have a higher chance of securing funding by participating in Reg CF compared to seeking capital from VCs and angel investors.”

The report ends with recommendations for policymakers, including strategies to boost participation and ongoing support for women and minority entrepreneurs.

The SBCFAC meeting is scheduled to take place on May 6, 2024, commencing at 10 AM ET. The meeting will be live-streamed on the SEC website.

The report is available below.


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