The SEC Small Business Capital Formation Advisory Committee (SBCFAC) will gather on February 24, 2026, to discuss two important items related to private markets.
One reason the US has the world’s most robust innovation ecosystems is the success of private markets, where early-stage firms can raise growth capital from the public. The largest sector is the Reg D marketplace, which generates over a $1 trillion in capital formation each year.
While private markets in the US are strong, they can always be improved. Two areas that merit review are Finders and Secondary Markets in private securities.
Finders is an issue that has been discussed at the SEC and on Capitol Hill ad nauseam with little progress. A Finder is someone who introduces investors to issuers in private securities and then may earn a fee. Today, if you do this, you should be a broker-dealer; otherwise, you may be bending the rules. A simple fix would be to provide disclosure for fee-based services. The thesis is that underserved or underrepresented markets do not always have investor networks to support early-stage firms. Clear rules can address this shortcoming.
Secondary Markets in private securities are growing in importance, and more platforms are entering this sector. This is a good thing, but some rules need to be modified to improve the process.
As public markets have been overregulated by excessive disclosure and obtuse reporting requirements, the cost of being a public firm is accessible only to well-established, larger firms. This, along with the ocean of capital that will fund early-stage ventures, has given rise to private markets. As more people, including retail investors, hold securities in private firms, liquidity beyond an IPO or M&A event benefits all parties. It is also part of the SEC’s investor protection mission.
The agenda for the next SBCFAC meeting is republished below, and the proceedings will be livestreamed on the SEC website and available to the public.
AGENDA
| 10:00 | Call to Order; Introductory Remarks by Commissioners |
| 10:20 | Deep Dive on “Finders” Continued
In furtherance of the Committee’s discussion on July 22, 2025, the Committee will continue its exploration of issues surrounding “finders.” As part of this discussion, the Committee will deliberate on potential regulatory improvements to the framework that could permit certain “finders” to engage in additional capital-raising activities. Speaker: • Steven Jafarzadeh, Chief Compliance Officer and Partner, Stonehaven |
| 12:00 | Lunch |
| 1:00 |
Update from the SEC’s Office of the Advocate for Small Business Capital Formation
The SEC’s Office of the Advocate for Small Business Capital Formation will provide an overview of the Office’s FY2025 Staff Report, which includes in-depth data on the state of capital raising activity from startup to small cap. |
| 1:15 | Shedding Light on the Private Secondary Market
As the IPO and M&A markets have shifted, the private secondary market has grown to fill liquidity needs and meet investor demand. Continuation funds are becoming more prevalent, and the rise of special purpose vehicles allow LPs, VCs, and other strategic investors to find exits and rebalance their portfolios through the private markets. Additionally, startups are using private tender offers to attract/retain talent. Committee members will hear from experts and industry participants in this space to better understand the data, deal flow drivers, trends, opportunities, and challenges that stem from the growth and normalization of private secondary transactions. Speakers: • Emily Zheng, Senior Research Analyst, Venture Capital, Pitchbook |
| 3:30 | Wrap-up and Adjournment |