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OASB Annual Report for Fiscal Year 2020 Released


On December 18th, the Office of the Advocate for Small Business Capital Formation (OASB) at the SEC released its Annual Report for Fiscal Year 2020. The report covers a variety of key topics on capital formation, including but not limited to the coronavirus pandemic, racial and gender-based inequities in capital formation with respect to small businesses, as well as capital formation for rural small businesses. Expanding upon these topics, OASB attempts to not only explain these phenomena but also issues policy recommendations in light of them.

The OASB reported on the effects of COVID-19. It noted several of the already well-known short-term effects on small businesses, yet explained that long-term effects are still unclear. Despite this, the SBA predicts “lasting fragilities within the small business ecosystem.” [1] Among these are significant drop-offs in the amount of businesses within a particular industry, increased reluctance to invest in particular industries, a general reduction in spending, and sudden shifts in the way business is conducted. Further, OASB reports that these impacts will be felt most strongly by businesses requiring in-person interaction as well as by founders and investors in historically underrepresented groups. [id.

The OASB reported on demographic shifts in small business founders and owners. From 2014 to 2019, women-owned businesses saw a 21% increase in the number of firms created, an 8% increase in total employment, and a 21% increase in revenue. While these demographic shifts indicate progress in equitable small business representation, they do not entirely align with capital formation. 

Women constituted only 27.6% of entrepreneurs seeking capital in 2019, and received a 21.4% investment yield rate compared to the baseline rate of 30.7%. [id.] Moreover, “women-founded companies received only 12% of venture capital dollars in 2019,” indicating underrepresentation in capital formation. [id.] Similarly, minorities constituted 9.3% of entrepreneurs seeking capital in 2019, and only received 28.2%. [id.] While the rate of investment in minority owned businesses is significantly closer to the baseline and has also experienced a sharp increase in the past few years, the rates of capital formation still indicate that there exist financial constraints corresponding to one’s race. The report indicates that the varied financial impacts of COVID-19 on small businesses also disproportionately affected minority entrepreneurs. [2]

Alongside reporting on these topics, the OASB provides an overview of capital formation for the fiscal year. There are several regulatory pathways through which small businesses–from emerging to established–can raise capital. The report’s overview details the amount of capital generated through each of these pathways alongside the median amount generated per small business. 

It is important to note that the impacts of COVID-19 on capital formation specifically cannot be properly reflected in these figures. Much of the financial activity analyzed in the report (up to September 2020) was arranged or occurred prior to the pandemic being in full effect. As such, COVID’s impact on capital formation will be much more ostensibly reflected in next year’s report. This is especially likely given that the number of small businesses decreased by 27% nationwide this fiscal year. [1]

Capital Formation by Emerging Small Businesses in Fiscal Year 2020

    • $88 Million was raised by equity crowdfunding (i.e. the general solicitation of a multitude of small investments online). Median: $100,000 
    • $171 Million was raised by limited offerings (i.e. investments from individuals related to the company for a total capital formation of up to $5 million). NOTE: This limit will be raised to $10 million next year. Median: $100,000
    • $69 Billion was raised by accredited investors (i.e. unlimited capital investments from the general solicitation of wealthy investors). Median: $900,000

Capital Formation by Established Small Businesses in Fiscal Year 2020

  • $60 Billion was raised by initial public offering (i.e. large capital formations through public investment via stock shares). Median: $150 million
  • $1.3 Billion was raised by mini public offering (i.e. online fundraising investments for a total capital formation of up to $50 million). NOTE: This limit will be raised to $75 million next year. Median: $2.1 million
  • $1.4 Trillion was raised by private placements (i.e. unlimited capital investments through private, wealthy investors related to the company). Median: $1.8 million
  • $1.5 Trillion was raised by secondary registered offerings (i.e. large capital formations through an SEC registration statement other than an initial public offering or IPO). Median: $99 million


[1] – Annual Report for Fiscal Year 2020, Office of the Advocate for Small Business Capital Formation, 21 Dec. 2020,, accessed 28 Dec. 2020.

[2] – “Small Business Advocate Releases Annual Report for Fiscal Year 2020,” U.S. Securities and Exchange Commission, 18 Dec. 2020,, accessed 21 Dec. 2020.

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