Latest from the Office of Small Business Advocacy

I’ve written previously about the SEC’s catchily-titled Office of the Advocate for Small Business Capital Formation (OASB). In summary, the OASB was created to support emerging companies through education and guidance on capital raising and other formation/start-up issues, to provide analysis and policy recommendations, and (as the name suggests) to advocate on behalf of emerging companies and their investors, with an eye to the perspectives of, and impacts on, small businesses. 

In January 2026, the OASB released its Staff Report[1], required as part of the Office’s statutory mandate, summarizing its work and presenting research and information on capital formation and

related matters in fiscal year 2025, with some references to data from 2024 as well. Based on both statistical data and outreach and engagement with small business owners and investors, the Report organizes its findings and observations by three “life cycle stage” of a business – Small and Emerging Businesses; Mature and Later Stage Businesses, and Small Public Companies.  In keeping with entreVIEW’s aim to speak to the entrepreneurial spirit, this summary will focus on the Small and Emerging Businesses sections of the Report. 

First, a few numbers: there are approximately 36.2 million small businesses operating in the U.S., and they are responsible for close to 9 out of 10 net new jobs. The Report states that 54% of people thought about starting a new business in 2025, but the costs and difficulty in accessing capital remains a significant and ongoing impediment—94% of small businesses faced financial challenges, and entrepreneurs report access to capital as the top obstacle limiting growth of their businesses. The Report notes utilization of personal funds, cash reserves, and credit cards as a prevalent source of funding for small businesses. In an alarm bell for consumers and employees (and job-seekers), the OASB found that 48% of small businesses address financial concerns by raising prices and/or cutting staff.

For companies that looked to outside financing sources, the usual suspects were cited: business credit cards (used by 16% of small businesses), bank loans (14%), government and government-guaranteed loans (13%), friends and family loans (6%), friends and family loans (6%), venture capital (4%), grants (3%), and crowdfunding (2%). However, many entrepreneurs seeking funding through these avenues received less than they were seeking, with less than half (43%) receiving the total amount requested from banks, and even less for VC funding (14%) and crowdfunding (7%).  

So yeah, it can be tough! But, the Report includes some helpful statistics to guide small businesses down a successful entrepreneurial path. First, and maybe a little obvious to those of us who work with emerging companies seeking capital, identifying a lead investor with a strong network can significantly reduce the failure likelihood of a start-up business. Look for mentors and support organizations such as accelerators. Many entrepreneurs report that they prioritize investors who can offer “thought partnership and tangible support” over investors who may simply be able to write a bigger check.  

The Report similarly notes the importance and impact of “angel” investors, who are much more open to investing in early “seed-stage” companies and businesses headed by first-time CEOs.  Friends and family are also vital in early fundraising efforts. The emerging theme is that both venture and start-up capital is heavily reliant on relationships.

So much more information and statistical data can be found in the Report (including in its 285 footnotes), but I want to wrap up this post with deal structure stats – near and dear to my heart.  The most common non-public deal structure by far was 506(b) private placements (raising $378 billion, significantly higher than the $47 billion raised by IPOs), followed by 506(c) offerings (offerings involving general advertising and solicitations to find investors) ($24 billion).  And a final shout-out to crowdfunding—the Report notes the median raise in 2024 was $114,000, and the average “successful” crowdfunding campaign raised $368,000. I was able to find some outside statistics for 2025 indicating some mixed signals for this type of funding mechanism, with over $378 million total raised in crowdfunding offerings, and an average raise of $572,000—but, overall, the number of new crowdfunding offerings is declining.

[1] This year’s report is actually the “Staff Report” rather than the “Advocate’s Report,” as the office of the Advocate is currently vacant following the departure of Stacey Bowers in October 2025.