Full-Service Law Firm solving complex challenges through bold thinking, precise execution, and shared purpose.

Full Service Law Firm | Michael Best & Friedrich LLP

Specializing in the Intersection of Business &amp; Government

Meet our team of trusted advisors, strategic thinkers, and community builders dedicated to client success.

Learn about our full-service legal and business solutions, designed to address complex challenges for leading organizations across industries.

Access thought leadership, news, and resources to stay informed about the latest trends, legal developments, and industry innovations.

Discover how partnership, bold thinking, and precise execution drive results for clients nationwide.

Explore how our national reach and local expertise support clients across the United States and beyond.

Grow at a firm designed to bring out your best.

On January 8, 2026, the SEC’s Small Business Advocacy Office issued their annual report addressing the state of small business capital formation. The report provides a snapshot of what is happening with small businesses across the U.S. The U.S. is home to 36.2 million small businesses that make up 46% of private sector employment. These small businesses created 9 out of 10 net new jobs from 2023 to 2024. The report notes that those entrepreneurs who have strong support and mentorship networks are generally more successful, have more resilient business plans, and maintain greater confidence.

core/paragraph

In examining pre-seed and seed financing data, the average pre-seed round was $50,000 - $250,000 and the average seed round was $1 - $5 million. The report highlights that most small operating companies rely on Regulation D to raise capital with $378 billion raised in Rule 506(b) offerings and $24 billion raised in Rule 506(c) offerings for the twelve months ended June 2025. Only $300 million and $235 million was raised under Rule 504 and Crowdfunding, respectively. Not surprisingly, pooled investment vehicles predominantly rely on Rule 506(b) to raise capital with $1.9 trillion raised during that same twelve-month period. Venture capital funds remain active with VC firms deploying $215 billion in capital across 14,000 plus deals in 2024. While initial public offerings remain low, the trend is on an upward trajectory with 180 IPOs during the first half of 2025, raising $28 billion as compared to 102 IPOs raising $19 billion during the first half of 2024.

The annual report contains a wealth of data and information about small business capital formation in the U.S. across company lifecycles, demographics, and geographic regions. It provides insights into who is raising capital, how they are raising it, where they are raising it, and ways to be successful at it. You can view the full report <a href="https://www.sec.gov/files/2025-oasb-staff-report.pdf" target="_blank" rel="noreferrer noopener">here</a>. It is worth the read.

Business professionals walking near the glass entrance of a modern office building with cityscape reflections.

SEC’s Small Business Advocacy Office Issues 2025 Staff Report on Small Business Capital Formation

Related People

Related Capabilities

You may also be interested in these

2026: The Year of the State Food Ingredient & Additive Bans

FTC Signals Aggressive Case‑by‑Case Enforcement on Noncompete Agreements

Whey to Go!