The SEC's own Form D filings for the second quarter of 2026 show 277 California companies, every one of them incorporated within the past two years, closing a private funding round between April and June. Ninety-one percent of those 277 reported no revenue at all, or declined to say. That is not a data quality problem. It is what a funded, pre-product business looks like on the one federal filing that captures it before anyone else does, and it describes a specific kind of reader: money in the bank, nothing shipped yet, no one in-house who can build it.
What Form D actually is
Form D is the notice a company files with the Securities and Exchange Commission within 15 days of the first sale of securities in an offering it is claiming as exempt from full registration, almost always under Rule 506(b) or 506(c) of Regulation D. It is a notice, not a prospectus: the issuer's name, its executives, and the offering's basic terms, not the audited financials a registered public offering would require.
The two rules split on how the company found its investors. Per the SEC's own guidance on Rule 506(b) private placements, a company using it "cannot use general solicitation or advertising to market the securities," and can raise an unlimited amount from an unlimited number of accredited investors plus up to 35 non-accredited investors it reasonably believes are sophisticated enough to evaluate the deal. Under Rule 506(c), the company can advertise the raise publicly, but has to take active steps to verify every investor's accredited status rather than taking their word for it. Three in four of the recently incorporated California companies below filed under 506(b): money raised quietly, from people the founder already knew, not from a public raise with a verification process behind it.
How the second quarter looked in California
The SEC publishes structured Form D data sets every quarter, the raw filings behind every Reg D notice, not a summary someone else has already written. The Q2 2026 file covers filings dated April 1 through June 30, 2026. Filtering it to California-based primary issuers, excluding pooled investment funds (venture and private-equity funds file the same form for an unrelated reason), and keeping only new filings rather than amendments to an earlier one leaves 586 operating companies. Of those, 277 were incorporated in 2025 or 2026, meaning this Q2 filing is plausibly the company's first outside capital.
Those 277 accounted for 12.5% of the 2,215 similarly recent operating companies that filed a new Form D anywhere in the country that quarter. Among the 228 of the 277 that had closed at least part of the round by the time they filed (the other 49 report zero sold so far, meaning the offering is open but nothing has closed), the median amount actually sold was $409,860. The entity type split almost evenly between limited liability companies (126) and corporations (119), and the median minimum investment a company said it would accept was $10,000, a friends-and-family or angel check size, not an institutional one.
Where the money is going
The SEC has each issuer self-classify into an industry group, and the picture across these 277 cuts against the assumption that a funding round means a software company.
| Industry group (SEC classification) | Companies | Share of 277 |
|---|---|---|
| Other Technology | 69 | 24.9% |
| Real estate (residential, commercial, other) | 87 | 31.4% |
| Other (unclassified) | 67 | 24.2% |
| Health care | 13 | 4.7% |
| Retailing | 6 | 2.2% |
| Business services | 6 | 2.2% |
| Investing, computers, restaurants, manufacturing, energy, biotech, banking | 24 | 8.7% |
| All remaining categories, one company each | 5 | 1.8% |
Fewer than three in ten of these companies, 73 of 277 (Other Technology plus Computers), filed under a technology classification at all. The other 204, seven in ten, are real estate syndications, medical practices, retail concepts, restaurant groups and categories the SEC's own form just calls "Other." Most of the money moving through this filing did not go to a company that builds software for a living. It went to a company that is about to need some.
What 91% reporting no revenue actually means
Form D asks each issuer to pick a revenue range for its most recent fiscal year, or mark "decline to disclose." Both options are self-reported and neither is verified by the SEC. Among the 277 recently incorporated California companies, 63 reported no revenue outright and 189 declined to say, 252 combined, 91% of the total. Only 11 reported revenue between $1 and $1,000,000, and just 6 reported between $1,000,001 and $5,000,000.
That split is not evidence of companies hiding something. It is what the earliest stage of a funded business looks like on a federal filing: capital closed, and a product usually not yet built or not yet billing anyone. A company with no revenue to report has not failed at anything. It has reached the point where the harder problem is no longer raising the money, it is building the thing the money was raised for.
A worked example
Picture a two-person team in the East Bay that spent eighteen months building relationships with independent pharmacies, then closed a $380,000 friends-and-family round this spring to build the compliance and reordering software those pharmacies have been stitching together from spreadsheets and phone calls. The company is four months old. Its Form D, if it filed one, would show a corporation, a 506(b) private placement, and no revenue, because there is no product live yet to bill against. Nothing about that profile is unusual. It is what most of the 252 companies in this data set look like from the outside, whatever industry the SEC filed them under.
Where a fixed-scope build is the wrong answer
This data does not say every one of the 277 needs a development partner right now. A company that raised money to hire a sales team, open a second location or buy inventory has no software gap to fill, whatever classification the SEC put it under. A founder who already has a technical co-founder building the product has already solved the problem this piece describes. And the 63 companies that filed under 506(c), the ones that advertised the raise publicly and had to verify every investor, skew toward a more institutional process that usually already has someone on staff who owns build-versus-buy decisions.
The fit is narrower than "recently funded": a non-technical founder whose round is earmarked for a specific product, who is part of the 91% with capital closed and nothing live yet, and who needs the thing the round was raised for actually built, on a scope and budget that match what was raised rather than what a rate card assumes was raised.
If a Q2 2026 filing describes your company (capital closed, an MVP still to scope, and no one in-house who can build it), the same bottleneck shows up whether the SEC filed you under real estate or technology. We scope every custom software build individually against what a round actually funds, with an itemised estimate within 48 hours, and here's what to keep in your own name before signing anything. Tell us what the round is for and we will say plainly whether a fixed-scope build fits it, including if the honest answer is not yet.
Sources
- U.S. Securities and Exchange Commission: Form D Data Sets, Q2 2026 (structured data covering Form D filings dated April 1 through June 30, 2026; analysis in this piece filters to California-based primary issuers incorporated in 2025 or 2026, excludes pooled investment funds, and counts new filings only, not amendments; accessed September 2026)
- U.S. Securities and Exchange Commission: Private Placements, Rule 506(b)
- U.S. Securities and Exchange Commission: General solicitation, Rule 506(c)
- U.S. Securities and Exchange Commission: Filing a Form D Notice