SEC Small Business Forum Report: Sherwood Neiss Comments On Recommendations, Tells SEC To Move Forward On Reg CF

In March of 2026, the 45th Annual Small Business Forum took place at the Securities and Exchange Commission. The report on the proceedings was published last month.

Participating individusals were asked top submit recommendations in advance and during the event, with a vote following to determine which actions should take priority.

All current SEC Commissioners participated in the proceedings, each commenting on the importance of facilitating access to capital and supporting small business.

Commissioner Mark T. Uyeda stressed that small businesses are the “cornerstone of the American economy,”  declaring the Commission’s rules should reflect that importance.

Commissioner Peirce made several suggestions, noting that early-stage funding suffers from “regulatory landmines” and highlighting the need to reform the current definition of an Accredited Investor.

The report lists the top five in each category, along with official Commission responses, with many aligned to the current 2026 SEC Regulatory Agenda. A summary of the recommendations are as follows:

Early-Stage Capital Raising

Expand the accredited investor definition to include sophistication measures (e.g., investor test/experience).
Modernize regulation of crypto assets that are securities (including secondary trading).
Create a new federal “friends and family” exemption that preempts state blue sky laws.
Expand regional/federal/state non-dilutive funding resources and create a centralized portal.
Raise the Regulation Crowdfunding (Reg CF) annual limit from $5 million to $20 million.

Growth-Stage Companies and Smaller Funds

Create a new private fund exemption for small/regional funds focused on community-based investing.
Preempt blue sky laws for certain off-exchange secondary trading (with robust public information).
Streamline private-to-public pathway by making restricted shares available under Rule 144.
Ease compliance costs/burdens for emerging fund managers with < $100M AUM.
(tie). Advance the INVEST Act.
(tie). Increase the 100-investor limit under Section 3(c)(1) funds.

Small Cap Companies and the Public Markets

Improve OTC trading transparency (more disclosure on short selling, institutional/insider holdings, paid promotion, transfer agent info).
Allow at-the-market offerings for all small public companies and Regulation A Tier 2 issuers that are current in filings.
Expand Form S-3 eligibility so more issuers can use it regardless of public float.
Revise Regulation A to simplify reporting and improve access to capital.
Pursue reforms to reduce unnecessary costs and liability barriers for becoming/remaining a smaller public company.

More recently, CI connected with JOBS Act OG Sherwood Neiss, founder of Crowdfund Capital Advisors and GUARDD, to hear his opinion about the Forum’s recommendations. While all of the suggestions hold merit, Neiss focused on online capital formation.

Neiss said the Forum has not told Congress what the data has been saying for years. The $5 million cap is the binding constraint on community capital.

“Reg CF was built to be the first rung on the capital ladder, and it works — but the next rung is broken. A company that maxes out at $5 million faces a gap: Regulation A costs six figures and six to twelve months of qualification, and Regulation D means leaving your community behind. A $20 million cap with inflation indexing turns Reg CF into a ladder companies can actually climb — from first check to growth capital — without abandoning the investors who got them there.”

Neiss reiterated his feedback that the Commission should address these shortfalls without help from Congress, as they have done before.

“It [the SEC] used its existing authority (Section 3(b)(1)) in 2020 to raise the cap from $1.07 million to $5 million — nearly a five-fold increase — and the sky didn’t fall. Disclosure worked, fraud stayed negligible, and the market matured. The same authority (Section 3(b)(2)) supports $20 million. Better still, the Commission has already told us the vehicle: its response to the Forum recommendation points to the exempt offering pathways rulemaking on its agenda for October. The ask is simply that the cap increase, indexing, and the crowdfunding vehicle fixes ride in that proposal so the public can comment on actual rule text this year.”

Neiss says their data (CCLEAR) shows that Reg CF companies have generated an estimated $42.5 billion in economic activity since 2016.

“… and that’s with one hand tied behind the market’s back. Raise the cap and three things happen. Successful issuers stay in the most transparent corner of the private markets instead of graduating away from it. Platforms get the economics to support larger, better-vetted offerings. And communities — not just coastal VCs — get to fund the growth rounds of companies they discovered first. All of it without touching investor protections: the individual investment limits, the disclosure regime, and the intermediary gatekeeping all stay exactly where they are.”

Under Chairman Paul Atkins, the SEC has made great progress on fulfilling its mission of enabling capital formation. Its support of the digital asset sector has consumed much of its bandwidth, but the issue has been pressing for years and suffered from neglect during the prior administration. As the Commission has just announced new crypto rules, you can expect it to shift its focus to other items on its regulatory agenda, including issues that affect online capital formation.