MATH Briefing - 1st Quarter 2014: SME Finance

March 31, 2014

MATH (Markets And The Hill) Briefing Series
Capitol Hill, Washington, D.C.
By invitation only


Small and medium-size enterprises (SMEs) employ nearly 50 percent of the private-sector workforce in the U.S., and dependable access to capital is key to their continued growth. Since the financial crisis, these companies have faced significant hurdles to securing traditional bank loans or equity investment. Banks are reluctant or restricted in their ability to provide critical lending, and the annual number of small company IPOs has faced a downward trend in the past few decades. A shifting regulatory landscape is further impacting opportunities to invest in America's SMEs (defined as fewer than 500 employees), and attracting new market participants.

This briefing will provide a landscape of the state of capital-raising for SMEs. We will discuss how innovative lending models are stepping in to provide critical capital to SMEs as traditional lenders alter the composition of their portfolios. We will also look at new securities registration exemptions, including Regulation A+, which will permit companies to raise up to $50 million from institutional and retail investors subject to a mini-IPO registration. How significant are these regulatory and business model shifts? What markets participants are most likely to benefit, and what new risks should be considered on a macro level?


Reena Aggarwal is the McDonough professor of business administration and professor of finance at Georgetown University's McDonough School of Business. She also serves as the director of the university's Center for Financial Markets & Policy. Aggarwal specializes in international stock markets, initial public offerings and corporate governance. She has worked on major consulting projects sponsored by Credit Suisse, Wachovia, the World Bank, the IMF, the NASDAQ OMX Group, United Nations and USAID. Aggarwal obtained her MMS from BITS, India and her PhD in Finance from the University of Maryland.

Jonathan Bock is a director and senior equity analyst at Wells Fargo Securities specializing in Business Development Companies (BDCs) often considered non-bank lenders. He has actively followed the BDC space since 2006 and is the chief author of a leading BDC quarterly research publication: the BDC Scorecard. His research is often cited by The Wall Street Journal, Barron's, the Financial Times and other prominent financial publications. Prior to Wells Fargo, Bock followed the specialty finance space at Stifel Nicolaus & Company and A.G. Edwards Inc. Prior to entering sell-side research in 2006, he was an equity portfolio manager/analyst at Busey Wealth Management in Champaign, Illinois. Bock holds a B.S. in finance from the University of Illinois College of Business and is a CFA charterholder.

Daniel Gorfine is director of financial markets policy and legal counsel at the Milken Institute. He focuses on financial innovation, capital access, and financial market issues. Gorfine spearheads the Institute's work on innovative capital access tools and the development of new financial technologies. Before joining the Institute, he worked at the international law firm, Covington & Burling LLP, where he advised and represented a wide range of business and nonprofit clients on commercial litigation/arbitration, regulatory, antitrust, and international matters. Gorfine graduated with a B.A. from Brown University, a J.D. from George Washington University Law School and an M.A. from the Paul H. Nitze School for Advanced International Studies (SAIS) at Johns Hopkins University.

Anna Pinedo is a partner at Morrison & Foerster. She has concentrated her practice on securities and derivatives. Pinedo represents issuers, investment banks/financial intermediaries and investors in financing transactions, including public offerings and private placements of equity and debt securities, as well as structured notes and other hybrid and structured products. She is the co-author of "JOBS Act Quick Start," published by the International Financial Law Review (2013). Pinedo received her J.D. from the University of Chicago Law School and her B.S. in foreign service from Georgetown University.

Paul Pryde is a policy and finance consultant specializing in market-based solutions to small-business finance problems. For the U.S. Department of Housing and Urban Development, he helped organize one of the first securitized sales of non-SBA small-business loans and subsequently advised states and localities on the valuation and/or sale of over $100 million in publicly-financed economic and community development loans. More recently, he served as the U.S. Treasury Department's principal policy consultant for the $1.5 billion State Small Business Credit Initiative. Pryde is a graduate of Howard University and has conducted graduate work in business and public administration at George Washington University.

For more information, please contact: Dianna Dunne, director of government affairs at the Milken Institute, at