SEC leaders aim to make IPOs more accessible

They’re still at it.

The Securities and Exchange Commission wants to make IPOs “great again,” and at the agency’s latest Small Business Forum, an annual gathering focused on capital-raising policy recommendations for small businesses and smaller public companies, SEC leaders as well as IPO and small cap experts shared thoughts on how to boost IPO activity in 2026.

SEC Chairman Paul Atkins, for his part, has previously proposed plans to encourage more IPOs, including cutting down on required disclosures and limiting shareholder proposals, per the New York Times. Some critics have said those measures could ultimately keep companies private longer.

At the meeting, held March 9 at SEC headquarters in DC, Atkins built upon some of those proposed ideas.

“One of my highest priorities with respect to the SEC’s disclosure rules is to scale the requirements with a company’s size and maturity,” he said. “Balancing disclosure obligations with a company’s ability to bear the burdens of compliance is particularly important where Congress has directed the SEC to promulgate a disclosure rule whose costs may have disproportionate impact on some companies.”

Atkins also added policy recommendations to the docket.

“For newly public companies, the SEC should consider building upon the so-called ‘IPO on-ramp’ that Congress established in the Jobs Act,” he said, referring to the extra time some smaller companies get to fully comply with SEC reporting rules. “For example, allowing companies to remain on the on-ramp for a minimum number of years, rather than forcing them off as soon as the first year after an initial offering, could provide companies with greater certainty and incentivize more IPOs, especially amongst smaller companies.”

“Raising capital through an IPO should not be the privilege reserved only for a few unicorns,” Atkins said.

Commissioner Hester Pierce tied small companies’ struggles to go public to broader SEC initiatives, most notably the possible end of quarterly reporting.

“Last year at this forum, we heard from the CFO of a smaller reporting company, who explained how, with limited personnel in house, the quarterly reporting process can be a continuous year-round activity,” Pierce said. “Moving away from mandatory quarterly reporting could allow smaller companies to more effectively allocate their time and resources, both of which are limited.”

Quarterly reporting is right behind me, isn’t it? Other panelists throughout the day also cited quarterly reporting as a potential barrier blocking the IPO path for some smaller companies.

“Being a public company does come with costs. Some of those costs are just purely monetary costs, the cost of having accountants and attorneys and SEC filings every quarter,” Dwayne Hyzak, CEO and member of the board of principal investment firm Main Street Capital, said.

“The other costs are the public visibility,” Hyzak added. “You’re on the clock every single quarter to post your results, and if you have a bad quarter, it can be pretty detrimental.”

For smaller companies looking to go public, this all amounts to “a simple cost benefit analysis,” he said. “Anything that the SEC and the public company world can [do to] make those costs more efficient, more effective, the more success we’ll have at having more public companies long term.”

Reid Hooper, special counsel at DC-based law firm Cooley, who worked in the SEC’s division of corporate finance early in his career, also called out disclosure rules and quarterly reporting.

“Scaling the disclosure environments with the size and maturity of a public company, that’s obviously a big focus of what the current SEC and Chairman Atkins’s agenda is,” he said. “It’s critical for a lot of these smaller public companies to be able to say, ‘Look, I’m not [one of] the largest tech companies out there; I don’t necessarily need to provide the same disclosure for these various areas that they do.’”

With respect to quarterly reporting, Hooper argued that “in the life sciences space in particular, the quarterly earnings process is not quite as material as it is for the other larger scale companies,” adding that offering some companies the ability to “just provide semiannual financial statements is something to think about as well.”

It takes courage: Others, however, argued that for small companies, quarterly reporting is just one of many worries ahead of an IPO.

“When someone’s thinking about IPO or just going public…the first thing I ask is: ‘How brave are you?’” Josh Colburn, a partner at Faegre Drinker who represents public companies, including “the smallest public companies you’ve probably heard of,” said.

For a smaller company going public, “you’re going from what is basically a semester-end exam to not just [a] quarterly [exam], you’re really getting tested every day,” he said. “Your price is up. Small reporting companies, your volume is potentially lower, and so you’re going to see more volatility in your stock, and you’re not going to know why. If you can get over that hump and you’re ready, everything else can fall into place.”

Like others, Colburn cited resource constraints as one of the biggest hurdles for small cap companies considering an IPO.

“It’s not just the money, it’s the people,” he said. “The difference between having one person who’s completely dedicated to IR and having [a] maybe outsourced IR function, or your CFO spending 20% of their time on investor relations, are night and day.”