After four years of virtual stasis, the Securities and Exchange Commission (SEC), Small Business Capital Formation Advisory Committee (SBCFAC) is doing what it should be doing and seeking ways to improve markets. The Committee’s next meeting, scheduled for April 28th, will discuss the moribund IPO market and why the number of public firms has been in decline for years.
While private markets have grown rapidly, public markets have seen fewer firms deciding to go public. This is due in part to the ocean of private capital willing to invest in a promising firm before it goes public. While there are other factors, you combine the aforementioned access to capital with the cost of becoming a public company, and it’s a pretty powerful reason why there were over 7,000 public firms around the turn of the century, and today there are around half that number. The current leadership at the SEC has publicly stated its goal of improving both public and private markets, something the SEC should have been pursuing years ago.
Make IPOs Great Again
The SBCFAC will begin the meeting discussin ghe existing regualtory framewor and how declining IPO activity is impacting companies (and investors). Edwin O’Connor, Partner and Co-Chair of Capital Markets at Goodwin Procter, will present his views on the IPO market, trends, and potential causes.
Later in the day, Beau Bohm, Managing Director and Global Co-Head of Equity Capital Markets at Cantor Fitzgerald, provided his perspective from the underwriter’s point of view.
The meeting will commence at 10 AM on April 28th and will be livestreamed on the SEC’s website. The agenda is shared below.
| 10:00 | Call to Order; Introductory Remarks by Commissioners |
| 10:20 | Member Observations on the State of the IPO Market
Committee members will share their perspectives on the IPO market and begin deliberating ways to encourage more companies to go public. |
| 11:00 | Deep Dive on Encouraging More IPOs
IPO activity has remained historically low in recent years, and the number of small public companies – and in particular small exchange-listed companies – continues to decrease. Although IPOs by small companies represented 44% of all IPOs in 2024, they represented only 3% of capital raised. The Committee will consider the existing regulatory framework and how decreased IPO activity and market shifts are impacting companies’ (including small caps’) desires to go public. The Committee will hear from an invited speaker will share views on the state of the IPO market, trends, and factors that may be at play. Committee member discussion will include consideration of potential regulatory reforms, ways to reduce IPO costs, and how to incentivize greater underwriter involvement with small caps. Speaker:
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| 12:30 | Lunch |
| 1:30 | Deep Dive on Encouraging More IPOs (cont’d)
The Committee will continue discussion regarding ways to encourage more companies to go public and will hear from an invited speaker who will share views on the IPO market from the underwriter’s perspective. Speaker:
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| 3:30 | Wrap-up and Adjournment |