Provides small companies with another tool to raise capital in the public markets
ARLINGTON, VA – The National Venture Capital Association (NVCA) today applauded the U.S. Securities and Exchange Commission (SEC) after the regulatory agency unveiled plans to implement a one-year pilot program to trade small- and medium-sized stocks in five-cent increments on U.S. stock exchanges.
“This is welcome news for the American entrepreneurial community,” said Bobby Franklin, President and CEO of NVCA. “Combined with the JOBS Act, the SEC pilot program provides small companies with another tool in the toolbox to raise capital in the public markets so they can expand their businesses and hire new workers. While limited in time, market and scope, this is the first step toward a solution that many thought would never happen. We are eager to work with the SEC to iron out the specifics and operationalize the program.”
“NVCA efforts to get the 2012 JOBS Act across the finish line resulted in a number of regulatory changes that are helping small companies on-ramp to the public markets. However, challenges remain for small companies after going public because of difficulties in creating robust investor interest necessary for maintaining strong valuations and opportunities for secondary issues. Allowing for the trading of stock in wider increments is one way to address this issue and we applaud the SEC for taking the first step to give small companies the opportunity to be successful in the public markets.”