The SEC’s Spring 2025 Regulatory Flexibility Agenda quietly tees up two proposals that could materially reshape how startups raise capital and how founders and early investors eventually get liquidity.
Both are slated for proposed rules in spring 2026. Neither has been published yet. But their inclusion on the Unified Agenda — and the way they’re framed — tells us a lot about where the Commission is headed.
The two items to watch:
- Updating the Exempt Offering Pathways (RIN 3235-AN42)
- Reproposal of the Rule 144 Safe Harbor (RIN 3235-AM78)
If adopted in anything close to their anticipated form, these changes could reduce friction at both ends of the private-company lifecycle: fundraising and resale.
Updating the Exempt Offering Pathways: Less Friction, Fewer Traps?
The SEC describes this project as a package of amendments designed to “facilitate capital formation and simplify pathways for raising capital and increasing investor access.” That language matters.
Over the last decade, exempt offerings have grown more complex, not less. Regulation D, Regulation A, Regulation CF, Form D filing mechanics, integration rules, and accredited investor verification have become a minefield for founders trying to do things “the right way.”
This proposal appears aimed at unwinding some of that complexity.
While the actual rule text isn’t out yet, the agenda framing strongly suggests changes in areas such as:
- Regulation D mechanics, including Form D timing and content
- Accredited investor definitions and verification, potentially expanding eligibility or simplifying verification standards
- Integration rules, which still trip up companies using multiple exempt pathways
- Coordination among Reg D, Reg A, and Reg CF, which today often feel like separate legal regimes rather than parts of a coherent system
If the SEC follows through, this could meaningfully reduce the legal overhead associated with early-stage fundraising — especially for repeat founders and companies raising in stages.
That said, “simplification” in securities law often comes with new conditions, disclosures, or reporting hooks. The devil will be in the footnotes.
Rule 144 Reproposal: Quietly About Liquidity
Rule 144 governs when founders, employees, and early investors can resell restricted securities without registering the sale.
It is one of the most important — and most misunderstood — rules in startup law.
The SEC has already proposed amendments once. This agenda item confirms it plans to repropose changes to the Rule 144 safe harbor, signaling that the Commission wants to broaden or modernize resale conditions but didn’t quite get it right the first time.
Why this matters:
- Liquidity pressure in private markets has been building for years
- Founders and early employees increasingly expect secondary opportunities
- Funds care deeply about exit optionality, even before an IPO or acquisition
Any meaningful expansion of the Rule 144 safe harbor could:
- Shorten holding periods
- Reduce technical resale barriers
- Expand who can rely on the safe harbor and when
That doesn’t mean free-for-all liquidity. But it does suggest the SEC is acknowledging that private companies don’t live on a straight line from formation to IPO anymore.
What This Signals About the SEC’s Direction
Taken together, these proposals point to a Commission that is:
- Prioritizing capital formation over procedural rigidity
- Acknowledging the reality of longer private-company lifecycles
- Willing to revisit legacy rules that assume IPOs happen quickly and often
They also suggest a deregulatory tone — or at least a recalibration — after years of incremental complexity layered onto exempt offerings and resale rules.
That doesn’t mean fewer rules. It may mean different ones.
What Founders and Investors Should Do Now
Nothing changes tomorrow. These are not final rules. But this is the moment to pay attention.
- Founders planning multiple fundraising rounds should assume integration and exemption rules may change
- Early investors should watch resale rules closely, especially for secondary planning
- Startup counsel should be ready to engage during the comment period — these are rules that actually affect how companies operate, not just how filings look
If you’ve ever felt that exempt offerings and resale rules were designed for a market that no longer exists, the SEC appears to agree — at least enough to reopen the conversation.
We’ll see soon whether the fixes are real or cosmetic.
