Speaker 1:
From the Library of the New York Stock Exchange, at the corner of Wall and Broad Streets in New York City, you're Inside the ICE House, our podcast from Intercontinental Exchange on markets, leadership and vision and global business. The dream drivers that have made the NYSE an indispensable institution of global growth for over 225 years. Each week we feature stories of those who hatch plans, create jobs, and harness the engine of capitalism. Right here, right now at the NYSE and at ICE's 12 exchanges and six clearing houses around the world. And now welcome Inside the ICE House, here's your host, Josh King of Intercontinental Exchange.
Josh King:
Let me tell you the story of a small, family-owned healthcare company that introduced a number of revolutionary medical products and procedures to the market. After a few decades of success, the New York Stock Exchange was regularly pitching this company to list on the exchange. "Come on in," we said, "The water's fine." The truth was, to be successful the company needed to raise capital, needed to expand its research facilities and grow operations.
Josh King:
The problem, the founding family believed, was that it couldn't stay focused on saving lives while fulfilling all of the pressures of being a public company. Eventually the small business, named for the brothers who founded it, raised about $35 million on the NYSE. This year, Johnson & Johnson, or Johnny John, as the floor brokers call it, marked its 75th anniversary of listing, and the 20th anniversary of joining the Dow Jones Industrial Average.
Josh King:
The ninth largest public company in the world almost didn't list on the exchange because back in 1944, companies were required to have a certain market cap, positive financials, a wide enough geographic distribution of shares, and had to publish this extensive owners annual report.
Josh King:
Those rules made sense back in 1944, but fortunately for the companies that have come public since, and the investors looking to invest in them, the rules have been updated since 1934, when the United States Securities and Exchange Commission, our chief regulator, was founded with its mission, as it says, to protect investors, maintain fair, orderly and efficient markets, and facilitate capital formation. Just this year the exchange and the SEC worked together to create a new on-ramp for biotech companies to tap the public markets.
Josh King:
In The Wall Street Journal, our vice chairman, John Tuttle, summarized our strategy, and I quote, "Why is this important? The needs of biotechnology companies are unique. These are companies purpose built for one thing, to develop life-changing drugs and move them through the clinical trial process to approval, when they can be commercialized and offered to the patients who so desperately need them. Yet, this process is costly. Capital becomes paramount. Unlike other startups biotech companies have little need for marketing spend, they have no mass manufacturing or distribution costs yet. Their organizations are generally small with limited complexity." So sayeth John Tuttle.
Josh King:
Will one of them become the next Johnny John? We won't know for another 70 years. But our guest today, Martha Miller, is the head of a brand new innovation within the SEC that is laser-focused on making sure those small businesses can find and raise the capital they need to succeed. How will she accomplish this goal, and what does it take to launch a brand new government agency inside another one? Our conversation with Martha Miller right after this.
Speaker 3:
And now a word from Artur Bergman, CEO of Fastly, NYSE ticker symbol, FSLY.
Artur Bergman:
Fastly is a edge cloud platform, we help deliver digital experiences for amazing customers like Spotify and Ticketmaster and New York Times. We have started eight years ago. It's been an amazing journey. We work very closely with our customers. We're a very critical part in their business. And we're very selective in type of customers we want in our network. Fastly is built by developers, for developers. Fastly is listed on the New York Stock Exchange.
Josh King:
Our guest today, Martha Miller was named the U.S. Securities and Exchange Commission's first director of the Office of the Advocate for Small Business Capital Formation, in December, 2018. Prior to joining the SEC, Miller was a partner at the law firm of Balch & Bingham LLP, in Birmingham, Alabama, where she represented companies and investors across a spectrum of corporate transactions. Welcome Inside the ICE House, Martha, and welcome to the New York Stock Exchange.
Martha Miller:
Thank you, Josh. I'm thrilled to be here today.
Josh King:
So Martha, before we begin, I happened to be watching the Delivering Alpha Conference live this morning on CNBC. There's Andrew Ross Sorkin sitting down with the chairman of the SEC, Jay Clayton. Andrew's loaded for bear, he's got really important questions. He throws the first real curve ball right at the SEC chairman. The SEC chairman says, "Andrew, I got to pause you. I'm going to look at the camera and say something first before I answer your question." He says something that I think you have to tell me as well, too, right?
Martha Miller:
Yes. It comes with the territory of being a regulator at the SEC, and that is the views I express today are my own and not necessarily those of the commission. It's built into regulation that I get to say that. With that, let's move into the more exciting part of the conversation.
Josh King:
In the introduction, I touched on some of your professional experience that prepare you to be the first Advocate for Small Business Capital Formation, but you're also part of a family of small business owners, including your grandmother. What did seeing them navigate the ups and downs of entrepreneurship teach you about what it took to succeed in owning and running a small business?
Martha Miller:
Yeah. My grandmother created a business when she found herself a single parent of three young children in a small town in Alabama. And her solution for how she was going to provide for her family, which is kind of revolutionary for a single woman in the '50s in the south, was to create a business. And I-
Josh King:
What did she do?
Martha Miller:
She started a business. She actually bought an old train station and she named her business, The Iron Horse, which is what people called the train that would roll through town. And she built a store that brought in products from New York. So, I'm glad to be in New York that's also had mythical esteem that we always had growing up because she would come and bring things down to Alabama, goods and wares that people didn't have access to. And they weren't covered in the one catalog that came in the mail quarterly that you could order things from. And she really was changing the nature of commerce there.
Martha Miller:
But what's really compelling to me is that she took that business and she built it from scratch, and there was no real guidebook. She didn't take in investor capital. She actually bootstrapped the whole thing. But it's the story of kind of the grit and determination. And my dad would tell stories about getting on his bike late at night when she would stay open late for someone that needed to come in after hours. And it's the figuring out how to make things work that is so compelling to me that made it where I naturally have a little bit of a magnetic attraction to smaller businesses.
Josh King:
Did it become a multi-generational endeavor? Your dad worked there. Was it still around when you were coming up?
Martha Miller:
Unfortunately, no. The business wound up when she was older, I think she sold it to someone and it didn't stay in existence. It's one of the classic tales of the founder's vision sometimes doesn't translate to someone else owning and operating.
Josh King:
We know what your grandmother did to start her business. What did your parents do? And were they guiding lights in the entrepreneurial business?
Martha Miller:
Yeah, my mother went out and hung a shingle and had a design business of her own. And then my sister followed in her footsteps, and she has a small business. So I'm kind of the oddball out in the mix that became a lawyer, but I became a lawyer that works with small business. So I think all in all, it balances out a little bit. But it gives me a different appreciation for what those challenges look like, and the fact that for small businesses, you often come home and the dinner table is the boardroom and you are continuing the conversations. They don't end at five o'clock for most smaller and growing businesses.
Josh King:
Now you say you became a lawyer, Martha, but the most common undergraduate degrees for students becoming lawyers, I don't know, might be History and political science. I'm not sure where cognitive neuroscience falls, but I imagine it's quite far down the list if you do the analytics of people coming into law school. Was law school always in the plan when you were studying at Vanderbilt? And how did the major of cognitive neuroscience prepare you for a legal career?
Martha Miller:
Yeah, so I arrived at college like most people, with very different ideas of what in the world the job market looked like and opportunities, then the reality. And one of the things that was a blessing in disguise that we all bemoaned was the liberal arts curriculum that required us to cycle through everything from philosophy to math, econ, science, to give you a broad based perspective. And if I had to describe myself in one word, I'd say I'm pretty curious. And I took some classes on the brain, and I realized that it was in some ways the linchpin for everything else.
Martha Miller:
And neuroscience is the study of the nervous system, cognitive neuroscience is the study of the mind and how people make decisions, whether conscious or subconscious. So I would argue that it's actually probably the most applicable degree to law as well as to finance, because it's how people think. And I draw from that more than just about anything else that I did.
Martha Miller:
I don't sit down and actually think about neurotransmitters and brain mapping as often, but I do think back about how people make decisions, what drives decisions and what they think drives decisions, versus some of the kind of innate, lingering elements of our biological origins. And I can go down a whole rabbit hole that can get nerdy really quickly on that one.
Josh King:
Let's go down some other rabbit holes, because I want to keep progressing through your career that eventually has brought you to the SEC. So after law school, you're at Georgetown, you practiced in Alabama at Balch & Bingham. You could stay in the South, but you were pulled and drawn back to D.C., why?
Martha Miller:
Yeah. So I think it gets to a more interesting question of how in the world did I wind up doing what I'm doing from the neuroscience, just really to your earlier questions. So I wound up going to law school, I of the recommendation of a professor who thought, "This is the place for you, I feel it," and he was a mentor. And I headed in and I thought I'm going to be a litigator, which I think is how most lawyers start out law school. They think, "Okay, I'm going to go to court." And I thought, "Ah, I can take these science concepts that are really hard and they're gritty, and I can help translate those into fine English."
Josh King:
Everyone wants to be Atticus Finch.
Martha Miller:
Everybody wants to come in and have the closing argument moment. And I got in and started doing some projects on it early on, actually in the summer of law school, and I hated it. And I hated it because I realized I was a mismatch for my personality, that I was actually a transactional lawyer and I had no idea. One of my early assign was to take some facts and come up with a memo on what we needed to do. And I came up with a memo, but I also walked into the partner's office and I brought in a spreadsheet, where I had gone in and calculated the value of settlement. And I had done my estimations of what the different costs would be, where the different break points were.
Martha Miller:
And I said, "Okay, here's the memo on where the facts on the law is, but let's also look at the settlement piece, which I think is the more efficient route." And he looked at me and he laughed me out of the room. And he said, "You really seem more like a transactional person that's looking for efficiency." And so I headed in and started dipping my toe into transactional work. And I realized, I love the efficiency of transactional work and trying to drive towards a goal. So from there, I wound up working in a wonderful practice and getting to work with companies in the Southeast. The law firm has a footprint across the Southeast, but we have a lot of clients that are all over. So I was everywhere from New England and California transactions and in between. And it was really wonderful.
Josh King:
Focused on some specific kind of industries or all over the map?
Martha Miller:
So, it had a lot of regulated businesses, and I had a chance to really get to work on a spectrum of transactions of companies raising capital and the deploying capital.
Josh King:
So, your office that you currently hold was established by the SEC Small Business Advocate Act of 2016, what was the problem that the advocate was created to solve?
Martha Miller:
So, the office came out of bipartisan legislation, unanimously out of committee.
Josh King:
Rare thing.
Martha Miller:
And that's pretty rare, which tells you there was something pretty big behind it. So, I like to point to say statistics that I think show kind of the two different sides of the coin in terms of what we're expecting out of emerging companies. On the one hand, you have a majority of net new jobs, post recession, that are created by small businesses, around 66% by most people's calculation. So, you've got job creation and expectation that new businesses are going to come into the market and are going to create opportunity.
Martha Miller:
And then on the other hand, you have the realities of how companies access capital. You have four out of five entrepreneurs that are not accessing any venture or private equity or institutional capital. And then you have two thirds of founders that are actually relying on their own savings, family. And that really breaks down very differently, depending on who you are and what resources you have. And so Congress looked at that mismatch and what we were hoping to have from small business, and then the way that small businesses actually access the lifeblood capital, and they got together and decided to create an office that was focused on proactive solutions to the problems that businesses were experiencing in accessing capital. And so that's where we came from.
Josh King:
And what kind of businesses are they? Are these the mom and pop coffee vendors set up outside on broad street at the Exchange, or the small cap companies that potentially are on the list for NYSE American or everything in between?
Martha Miller:
Yeah. Small for our office is a very relative definition. So we're looking at everything from what you might think of as small companies, from startups and emerging main street businesses that are accessing a variety of different... They generally cobble together lots of different types of capital, from bootstrapping to debt, to angels and crowd funding, and you name it, they're pulling together what they can get for the smaller... And it also expands into your more mature and growing companies that are accessing more institutional capital and getting ready to go to public markets.
Martha Miller:
And then we pick up what most people do not at all think of fits within the small business definition, smaller public companies. So your small cap companies that are trading here on the New York Stock Exchange, but they face challenges. And we want to make sure that to the extent there are issues that they're facing that are a result of our rules, that are impacting their ability to go to market, or conversely for companies that could list, but that are looking at the regulatory hurdles and thinking, "Ah, maybe I won't go that path because it's not as efficient from a regulatory perspective." We need to hear that perspective and fix those issues.
Josh King:
Have you heard a lot of those stories since you've been on the job over what now, seven months?
Martha Miller:
Oh yeah. We hear lots of stories, and the stories are what really captivates you.
Josh King:
I want to hear about the stories that affect a certain part of the population of small business owners. We had Accion's CEO, Michael Schlein, on the podcast who shared that women make up a significant number of micro-financed and small businesses that they work with across the globe. Is that what you're seeing here in the US as well?
Martha Miller:
Yeah, we see that women are raising capital as in some ways using different tools. There's certainly all the tools are built to be agnostic as to who you are. Everybody gets the same playbook, but they play the game a little bit differently, depending on who they are and the perspective that they bring. And so one example is that in crowdfunding, we've seen that women are finding more success with crowdfunding, statistically speaking, in terms of utilization of that offering type, than with some of the other exemptions.
Martha Miller:
And it's interesting to see that, and we don't know exactly what the reasons are. You can hypothesize, and we've heard people that have given their own theories. Some of the theories have been, we've got a definition of accredited investor, which is really a proxy for sophistication of that investor, and when you can use the private more markets to access private individual and other investors. And we've heard some women, including one that we just talked to last week that said, "My network of people that are high net worth is different than other people."
Martha Miller:
We've also heard people talk about, along those lines of what their network looks like and how they go about accessing that network. General solicitation, that's a lovely legal term, which is really not going out and broadcasting that you are seeking capital, but instead staying within your network. We have rules that prevent you from going on the internet. You can't get out and just tweet and announce that you're raising capital unless you're fitting within a public offering or within one of the exemptions that allows it. And so we've heard from people-
Josh King:
I seem to remember Elon Musk did something like that.
Martha Miller:
No comment. How about that? But yeah, the rules around that potentially have a disproportionate impact on women, on founders of color, on founders that are in areas that don't have as dense of networks of potential investors, or investors that invest in their industry. And so that's the type of feedback that I really value receiving because that helps us to think critically about rules that we intended to apply across the board. And to realize that maybe we need to take a different perspective to how we regulate those offerings.
Josh King:
And in terms of taking a different perspective, I think in June, the SEC issued a concept release to explore the harmonization of private market offering options to promote capital formation for growing companies.
Martha Miller:
So, I compare harmonization to the roadways, and thinking about efficient pathways to get to your destination. And our goal is not to tell you where you're going, but to make sure that the path that you can take is a smooth and efficient roadway. And the analogy that comes best to mind to me is thinking about me driving a couple of weeks ago, Downtown D.C. And there was a construction zone that was highlighted, but there was absolutely no construction that was happening there.
Martha Miller:
But nonetheless, we filed into a single line and traffic slowed down and really just stopped. And I sat in the tunnel thinking, "Huh, I wonder how many of our rules are like this, where we have left different caution signs in place, where we've told people to slow down, that they can't proceed at the speed that they think they should be able to?" What we need to figure out is where do we have some of those lingering road signs or blockage points or blocked exits that people can't take, and let's make the roads work really efficiently so that everybody can get to their destination at the speed that makes sense.
Josh King:
I mean, is there enough time to get that done, Martha? Because Chairman Clayton gets nominated by the President, gets confirmed by the Senate, gets in office into mid 2017. You've started this year. There will be only so many years that you will hold this job before you're on to bigger and better things perhaps. And there's a lot of work to do. What kind of results are you feeling just in terms of this first several 100 days on the job and how do you think you can get a lot of change done before you have to pass to the next advocate?
Martha Miller:
Well, one thing that I'll point to is we've got our regulatory agenda that's out there and it's very capital formation focused. There is a lot in there, harmonization being one element of that. And there's a lot of momentum to get things done. The harmonization concept release didn't come out of nowhere. It came out of a lot of people having been coming forward and saying, "Please fix things." So this is the window to start fixing it, and we're going to try to move quickly on it. There's a lot of opportunity to bring some relief to the markets and to make sure that we have got a robust pipeline of companies in the private markets that have an opportunity to then go public.
Josh King:
So you're talking about moving quickly, Martha, as the head of what you've described as a startup inside the government, you did what everyone you're advocating for should do, which is put together a business plan for the first year. The document laid out the purpose of the office and a detailed roadmap for meeting them. What's your vision for the office?
Martha Miller:
Yeah. So creating the office, there is actually no good guidebook or roadmap for how do you new office in the government? Very few people have actually had the privilege of doing that. And so when I approached it, I did what most small businesses and startups do, which is put together a business plan. And I think that business plan really does a good job of giving people a sense of where we were going.
Martha Miller:
A lot of people, when we first got started, they had a lot of questions about, okay, who are you? What exactly are you going to focus on? How are you going to do it? When can we expect to see different things from you? And I wanted to put that out there for people so that they could know what to expect and follow along with us. And so that business plan, it looks very much like a startup business plan, except we got to amend a few sections because we are not looking to actually raise capital with it. We're looking to get buy in into the support.
Martha Miller:
So we talk about kind of our mission, what's our vision? How do we approach things from a pragmatic and efficient perspective? And then laid out kind of what's our MVP or minimum viable product, which most startups come out with, okay, exactly what are you going to deliver and when? And then what's the full scale suite of your product or service that you'll be delivering?
Martha Miller:
And so we put that out there and it was pretty funny. We put it together in an internal draft and I put in there quarters of when you could expect us to do different things. And I had some people internally go, "Ooh, that's very dangerous to go ahead and tell people when. What if you don't get it done by then?" I said, "Well, this will hold our feet to the fire. I plan to get it done by then." And thankfully, I don't know where the wood is in the room to knock on, but we have been on track and been launching everything at really warp speed. The solutions are needed, they're very much so needed. And so we are thrilled to be off to the races.
Josh King:
You probably could have been appointed to head different government departments that had been long been formed and had a good roadmap, or had a business plan laid out that you could modify and tweak and improve on. You're coming into something with a blank sheet of paper. Curious why you put your hand up to start something really from scratch. And then in the writing of that business plan process, was that before you walked through the doors of the SEC or you're already in the job with your team, rolling your sleeves up, "Leave us alone for a week while we hammer this thing out"?
Martha Miller:
Yeah. As a lawyer, you're often called upon to tell people kind of where the stripes are in the road. And then when they start veering over too closely, "You can't do that." And that's not a fun answer to give. And so when the opportunity came to, instead of saying, 'You can't do that," to instead say, "Well, why can't you do that? What if we did change the rules?" That is absolute, I mean, that's just such fun. And it's so appealing, I think there's 1000 people out there who would love the opportunity to get a chance to say, "Why not?" Instead of, "No."
Martha Miller:
And so I have been very fortunate to get a chance to why not. And from the moment that I walked in the door of the SEC and was talking about this role, one of the first questions was, "How in the world are you going to build the office out?" And so the thought process around the business plan started really early. And it was ultimately developed once I was in the office and spent time talking to about 100 different people before I started putting pen to paper on it, because I wanted a lot of feedback on what would be the most valuable thing? How to prioritize? How to scale efficiently with the different things we needed to do? What we could deliver quickly for early wins for the marketplace?
Martha Miller:
And so it's been a wonderful process. I highly recommend going through it. I know business plans are actually a little bit controversial in terms of, in the startup scene of whether or not you need them. I don't think you need a 40-page business plan. Ours is about 10 pages and it cuts straight to the meat of what we're going to do, when we're going to do it, and how you can engage with us.
Josh King:
The event that brought you to the New York Stock Exchange today featured a keynote address by Cowen's CEO, Jeffrey Solomon, who sits on the Business Capital Formation Advisory Committee with you. If we are going to extend the analogy of the Advocate Office as a startup, is the committee that Jeff sits on your board of directors?
Martha Miller:
Yes. So, the committee that Jeff sits on, he's the vice chair of that committee. And he's just been wonderful to work with. I've really enjoyed getting to know him. The committee that he's sitting on is a new committee. It was constituted in May with their first meeting. And they have been off to the races, already delving in substantively on topics, including 404(b) disclosures and M&A disclosures, and weighing in and giving really valuable feedback from the market.
Martha Miller:
We have had a longstanding committee that was actually wound down with the legislation that created our office, and it constituted a new committee. And so this is the 2.0 version. It's a totally different committee, but we're thrilled to have them here and thrilled to have the leadership of people who really understand the markets and are helping guide us strategically at the commission.
Josh King:
After the break, Martha Miller, the SEC's director of the Advocate for Small Business Capital Formation, and I talk about how year one of the office has gone and how small business formation will be improved in the near and long term future at the SEC. That's right after this.
Speaker 6:
It's more than an iconic building or a global financial marketplace. It's anywhere technology, commerce, and people intersect. The innovation that makes people's lives better, dreams that were once impossible are now realities. At the New York Stock Exchange, we help tech companies flourish and change the world. So go ahead, bring those ideas to life, we'll bring it to market. We are living time.
Josh King:
Welcome back. Before the break, Martha Miller, the SEC's director of the Advocate for Small Business Capital Formation, and I were discussing the form of the Advocate's Office and her career path to becoming its director. Maybe one question before we really get into the second half, Martha, did you call on the office of long naming government departments to try and do some analysis on how to truncate the name of this place?
Martha Miller:
Yeah, I wish. The title is embedded in the US code. So I didn't get a chance to give it a catchy, branded title. So we were stuck with a long, very DCS acronym.
Josh King:
You've been crisscrossing the country since you first took on the role. Your first speech as advocate was in Kansas City, to the time that you spent earlier this week in Arkansas. What are some of the advantages of getting out to meet small business owners on their own turf?
Martha Miller:
Yeah, I think that what's the most incredible about getting outside of the little bubble in which so much of the regulatory world works is actually hearing how people are really using the rules, and how they're really finding success. The other piece, it almost sounds obvious, is people love being asked for their opinion. And they're shocked when they get a chance to actually weigh in.
Martha Miller:
A lot of people, they've thought they're too small, whether they're a small business or an angel investor in their community, they haven't thought they were the big fish that we wanted to hear from. And we've always wanted to hear from them, but now we're going out and making sure they have a chance to really meaningfully weigh in. And that is really powerful.
Josh King:
So what is, when you ask them, the number one barrier between them and access to capital?
Martha Miller:
Totally depends on what type of capital they're looking to raise. The barriers look very different. One thing that our office did because we span such a broad swath of the market, we've actually broken it into one thing, you'll find it in our business plan, a nice plug, if you want to go look online and find it, and we've broken into three market segments. So one is your really small emerging companies that are bootstrapping, they're using a combination of a lot of different types of capital raising techniques to raise relatively small amounts, to get the businesses off the ground or to fund smaller, incremental capital expenditures.
Martha Miller:
There's that middle tranche, which are what I would call kind of the later stage, mature and growing companies that are accessing really big amounts of money, typically from institutional investors. They face totally different issues than somebody that is looking for a million dollars or $500,000 when you're looking at raising what here is the round that leads you to Wall Street. And then when you look at the smaller reporting companies and public companies, they also have a totally different issue set when they are looking at their compliance obligations with the capital markets. And so we have to think about them in different ways and make sure that we're coming up with solutions that address the needs across all three categories.
Josh King:
Martha, public companies follow a number of regulations that are not required for private ones, such as quarterly earnings, the expense, both in dollars and manpower of producing quarterly earnings have led CEOs of mega cap companies to come out against it. President Trump has tweeted about it. Is this a topic that you think should be looked at particularly for smaller public companies?
Martha Miller:
So, in terms of a topic I think we should look at, anytime the market is speaking up on something, I think we should be looking at it. And I'm very interested in the perspectives of how we strike the right balance with disclosure? What do investors actually want and need? And let's find the right balance so that companies investors can work together in symbiosis really efficiently.
Josh King:
So in August, the commission proposed a shift in principles-based disclosure requirements, and also adds a new disclosure topic regarding human capital. How will these changes modernize reporting, and how does that affect the companies that you're advocating for?
Martha Miller:
So, I think that principles-based disclosure is a welcome change that was driven by the feedback of what companies and investors are really looking for. I would say for me, looking at how smaller companies interact with that, really also comes back to the lawyers that are advising them. The one thing that I really think could be potentially concerning is if you have lawyers that find it to be very safe to stick with the prescriptive list of disclosures, as opposed to principles-based, and are hesitant to give clients and businesses advice on how to move to a more streamlined disclosure set. But I think the more that we can look at ways to make it more efficient to get information out to investors about the things that investors care about, the better.
Josh King:
So Martha, last month, you and SEC Chairman Clayton attended the 38th Annual Government Business Forum on small business capital formation. The first year that you were responsible for the event, you went to a place that I went many years while I was at first data, why was Omaha, Nebraska the right location to hold this place?
Martha Miller:
So, we took the entire commission on the road, which is I think the one time of the year that we actually get all five commissioners out of D.C. and at a big event together, which is really a testament to the importance of capital formation to the entire commission. And it was wonderful getting a chance to plan something that has a long history. There are people that almost view it as an alumni reunion, that are really passionate about this space and they come every year.
Martha Miller:
But we've had a tradition over the past couple of years of taking the forum outside of D.C. and going out into the market and engaging people in different places, and getting new per perspectives. And looking at what's happening in Omaha, they've branded themselves the Silicon Prairie, which is, I think everybody has a Silicon something, a Silicon slopes, a Silicon coast, a Silicon this and that.
Martha Miller:
But what I really love is their Chambers motto, We Don't Coast, which is both a metaphor for not being content to sit on the sidelines and just skate by. But it's really a proactive grit and determination in their business community, but it's also very accurate. I mean, they are as far from the coast as you can possibly get.
Martha Miller:
We hosted the event at Heider College of Business at Creighton University, and their Dean stood up and he pointed out that Omaha, when people ask where it is on the map, it's the staple in the middle of the Atlas. I mean, it's pretty much in the middle of the country, which I didn't quite realize just how center of the country it was until he made that reference. But it was a good chance to go somewhere that I don't think the entire commission's ever been, and to hear from people who have really never had a chance to weigh in, and they're not thought that they were relevant to weigh in on our rules. And it was a wonderful event.
Josh King:
How long does it last?
Martha Miller:
So it's a day-long event, and it starts in the morning where we have different panels and speakers and the commissioners each speak and get a chance to talk about what capital formation means to them, whether it is talking about a spouse that runs a small business or the small business that sponsored their baseball team growing up, or the small business that a family member ran. Each of those were things that the commissioners brought to the table.
Martha Miller:
We had a wonderful panel that talked about how they found success raising capital and what they're doing to build really neat companies. I mean, you have companies that are being built, technology companies that are employing 100s of people in sports and AI technology. And just very interesting stories that you hear when you actually give somebody a microphone and let them tell the story.
Martha Miller:
And then we talked a little bit about harmonization and that concept release and got in the weeds a little bit, as you might expect from a securities conference. The really neat part is the afternoon. In the afternoon, we break out into rooms and we broke out along those three different segments of the market. And we ask people to start out and talk about what are the most pressing issues that they see. And we did it via Word Cloud and used technology that gave people a chance to weigh in.
Martha Miller:
You don't have to be the loudest person in the room, you can weigh in somewhat anonymous on those issues. And so we started with the issues. And then those rooms delved into a conversation about the solutions to those issues. And ultimately what you'll see out of that, we have a report that'll be delivered summarizing that, and that's going to go to Congress. It goes to the commission and it really sets out, "This is what we are hearing from the marketplace. This is not the perspective of our office or of the commission, this is what people are telling us are the key issues and what we need to work on solving." And that's pretty powerful.
Josh King:
The forum in Omaha was conveniently coinciding with the Maha Discovery Festival, an entrepreneurial conference. I read your address to the group and had flashbacks to President Reagan's famous quote, the nine most terrifying words in the English language are, I'm from the government and I'm here to help. Was the group more receptive of your thoughts than you feared?
Martha Miller:
Yeah. That is something that it is terrifying to most people. And we've learned that if I send a cold email to somebody from an see.gov email address, it goes unanswered. I mean, people don't know what to do with a regulator that's reaching out to them. And so one of the things that I've realized we have to do is we just have to own that.
Martha Miller:
So I stepped up, I actually told the story at Maha of the first event that we did, and I'm all excited. We've gone to Kansas City and we're going to speak to a group of entrepreneurs. And I step on stage and there's 100s of entrepreneurs in the crowd that had been practicing their pitches. And I stepped on stage and I said, 'Well, I'm from the S E and I bet you're wondering why I'm here." And a guy on the front row got loud. He just shouted back. "Yeah. Why are you here?" I mean, really wondering what in the world we are there doing.
Martha Miller:
And so I've had a wonderful opportunity to get to own that element of it and to try to craft a different experience for people working with the government. I think that, you quote Reagan, I think he had a sign in his office that said, you can do a lot of good if you don't care about getting the credit, or some derivation of that. Our office is really not about getting the credit for things, but about making sure that good things happen for business. And as soon as people realize that, as soon as people realize that there's somebody who cares about what's happening with their company and that we want to make sure it's successful, they want to talk to us almost immediately.
Josh King:
I mean, it must be eyeopening for them to have a government agency or government office actually being their helper and their friend rather than one that is trying to be burdensome.
Martha Miller:
Yeah, it is. It's different. And I think that advocacy is in our title. Advocacy means a lot of things to a lot of different people. I love to read and love the etymology of words. I think it's fascinating. And the etymology of advocate comes from some medieval language, vocare, meaning called to use your voice. The same root of the word for vocal and vocalization. But it's a call to use your voice for others. That's really what we are. We are a megaphone for the voice of other people. And giving them a chance to see that there's somebody that cares about the issues they're facing, but that can bring that perspective and those issues to bear in the right rooms at the right time to change and bring solutions on them.
Josh King:
If your customers are these businesses, how do you want your customers to go away from an interaction with you or your team feeling about the advocate?
Martha Miller:
I want them to feel empowered. That's the one word I would use. And to recognize that there is a champion, and that we want the capital markets to work really well no matter your size, and for you to have your opportunity in the world if you've got a wonderful idea or concept to bring it to market.
Josh King:
You created your business plan at the beginning of your year as you started this role, as 2019 enters its fourth quarter, what do you think you still need to accomplish as you look back at what has been your first year rollout and your entry into the SEC's and the small business ecosystem?
Martha Miller:
Yeah. We've heard from 100s if not 1000s, I don't have the exact tally of people. We still need to hear from more people. We need more perspectives brought to the table. We need more people realizing that they can use their voice and impact the way that the capital markets are regulated. Looking ahead, I'm really excited. We're delivering our first report at the end of this calendar year, and that will lay out our recommendations based on the feedback we've received.
Martha Miller:
Josh, early on when I first started the office, I had a lot of people that would ask me, "Okay, so what do you think about this topic?" Or, "What are you going to prioritize first?" And I would look at them and tell them, "Do you really want my perspective or do you want to hear from the market? Because we haven't yet heard from the market. We don't have a statistical sample size that gives us really the pulse. It's not about my perspective, it's about what we're hearing and communicating that in a compelling way." And so I'm looking forward to delivering what we have heard from the market this year, and looking forward to 2020, what we can accomplish and drive on that policy agenda.
Josh King:
Do you wait until you finish the 2019 report until you make your 2020 plan, or is that happening in parallel?
Martha Miller:
It has to happen in parallel. I mean, realistically speaking, so we are working on that actively right now.
Josh King:
What are some of the key performance indicators that you think you'll need to add to better track the success of the SEC helping small business going forward?
Martha Miller:
Yeah. Every business has their KPIs and ours are a little bit different because we don't track the same customer traction and adoption rates. But what I do think is important is to see how many issues have come forward, how many different regulatory items have come across the agenda and where have we been able to impact them positively? That's the most important one for me.
Josh King:
You've described your job, Martha, as a megaphone for your constituents. And what are you hoping to raise awareness around in the coming years that you've not had a chance to tackle yet?
Martha Miller:
I want us to think really holistically about the ways that companies communicate with their investors. I think that sometimes, we all too often, I think particularly in D.C. like to think about, there's investors on one side and then there's companies on the other side. And in my perspective, and the experience that I bring, there is no two different sides. They're sitting at the same table.
Martha Miller:
And what's good for investors is good for the company, and what's good for the company is good for investors. And I think that the more that we can derive solutions that bring mutual benefit, the better. That requires thinking about things sometimes a little bit differently. It's really easy to think in very discreet buckets, as opposed to thinking about broader dynamic forces of the market. And that's the most challenging part of the job, but it's the one that's the most exciting.
Josh King:
If a podcast is a megaphone, what would you tell them in addition to everything that we've talked about today about what the advocate can do and the role that your office plays and the opportunities that they have working with the SEC?
Martha Miller:
Yeah, so the podcast is definitely a megaphone. I love podcasts. I'm at risk of speaking really fast because I listen to them every morning at usually one and a half to two times the speed, as we like to call it, chipmunk speed. So apologies to anyone listening, if you really need this one to slow down to three fourths of the speed of the speaker, but it is a megaphone. If you take away anything from today, take away that I want to hear from you, that we have an entire office and a team that is interested in your perspective.
Martha Miller:
And you can contact us in a way that you don't usually experience with calling somebody, whether it's customer service or anything else, you don't dial one and then shout representative on repeat into the microphone, hoping that you get a person on the line. When you call you either catch a person, or if we're not at our desks 'cause we're often working and not sitting at our desks, if we're not at our desk, you leave us a voicemail and we actually call you back. We're here, we're your teammates, and we want to see you succeed. So reach out to us.
Josh King:
How do they find you?
Martha Miller:
So you can find us in just about any way that you like to communicate. I mean, everything from Twitter to fax, to the internet, to phone. The easiest is to email Small Business at sec.gov. You can also visit us online at www.sec.gov/oasb. We laughed about the length of our name, our acronym doesn't have all of the letters in it, just because it gets to be a little bit too much, so we just use OASB. And we've also got a lot of resources online at sec.gov/smallbusiness.
Josh King:
Small Business at sec.gov. Thanks so much, Martha, for joining us Inside the ICE House.
Martha Miller:
Josh, thank you very much. It's been a pleasure.
Josh King:
That's our conversation for this week. Our guest was Martha Miller, Advocate for Small Business Formation. If you like what you heard, please rate us on iTunes so other folks know where to find us. And if you get a comment or a question you'd like one of our experts to tackle on a future show, email us at ICE House at theice.com, or tweet at us @icehousepodcast. Our show is produced by Pete Ash and Theresa DeLuca, with production assistance from Ken Abel and Ian Wolf. I'm Josh King, your host, signing off from the Library of the New York Stock Exchange. Thanks for listening. Talk to you next week.
Speaker 1:
Information contained in this podcast was obtained in part from publicly available sources and not independently verified. Neither ICE, nor is affiliates, make any representations or warranties, express or implied as to the accuracy or completeness of the information, and do not sponsor, approve or endorse any of the content herein. All of which is presented solely for informational and educational purposes. Nothing here in constitution offered to sell a solicitation of an offer to buy any security or a recommendation of any security or trading practice. Some portions of the preceding conversation may have been edited for the purpose of length or clarity.
