Should I Build My Startup’s Reporting Rhythm Around Quarterly or Semiannual Disclosure?

“We’re years away from an IPO. Why would this affect us now?”

It is a fair question.

Your startup is still focused on product development, revenue growth, hiring, and fundraising. Public-company reporting seems like a problem for much later.

But the investors sitting on your board today may be the same investors evaluating your company when you eventually go public or sell.

That makes reporting discipline relevant much earlier than many founders realize.

On May 5, 2026, the SEC proposed allowing public companies to file semiannual reports using a new Form 10-S instead of quarterly Form 10-Q reports. The proposal would represent a major change to the public-company reporting system. The comment period closed on July 6, 2026, and the proposal remains contested rather than settled law.

For founders, the important question is not simply whether the SEC ultimately changes the rules.

It is whether your company is building a reporting system that can support either outcome.

What Is the SEC Actually Proposing?

The proposal would give public companies a choice between quarterly and semiannual reporting rather than requiring every company to follow the same quarterly schedule.

That distinction matters.

The proposal does not force public companies to stop reporting quarterly.

A company could continue filing quarterly reports if its management team and investors believe that is the better approach.

At the same time, a company could potentially elect the less frequent semiannual reporting structure if the final rules permit it.

For a startup planning toward an eventual IPO, that means the future reporting environment may provide more flexibility than today’s system.

But flexibility does not necessarily mean investors will expect less information.

The Proposal Is Still Unsettled

This is an important point for founders.

The SEC proposal is not the same thing as a final rule.

The comment period closed on July 6, 2026, after nearly 12,000 comment letters were submitted. Approximately 97% opposed the proposal. A CFA Institute survey also found that roughly 62% to 70% of professional investors were against the change.

That level of opposition suggests the debate is about more than reporting mechanics.

Institutional investors are concerned about what reduced public disclosure could mean for transparency, valuation, and investor confidence.

For founders, the practical lesson is simple: do not build your internal reporting strategy around the assumption that semiannual reporting is already the new standard.

Investors May Still Expect Quarterly Information

Even if the SEC ultimately permits semiannual reporting, companies may continue providing investors with more frequent information.

Why?

Because public reporting rules and investor expectations are not necessarily the same thing.

Companies choosing semiannual reporting could still face pressure from investors to provide quarterly updates.

This matters because investors use regular financial information to evaluate:

• Revenue growth.
• Cash position.
• Operating performance.
• Business risks.
• Management execution.

A company that provides less information may therefore face additional questions even if its reporting cadence technically complies with the rules.

Lighter Disclosure Could Affect Investor Perception

The current debate also reveals how investors may react to companies that choose less frequent reporting.

Strong opposition from investors signals concern about reduced visibility. That concern could potentially appear in valuation discussions and due diligence, particularly when companies approach future financing rounds or an exit.

That does not mean every company choosing semiannual reporting would automatically receive a valuation discount.

It does mean founders should understand that legal permission and investor preference are two different things.

A reporting structure can be technically acceptable while still creating questions from the people providing capital.

Your Reporting Infrastructure Should Support Both Options

The biggest practical issue for startups is not deciding today whether the company will eventually report quarterly or semiannually.

It is building systems that can support either cadence.

Companies that build reporting infrastructure around only one reporting rhythm may create significant rework later.

For example, your finance and governance systems should be capable of producing reliable information without requiring the team to rebuild everything when reporting expectations change.

That includes maintaining disciplined processes for:

• Financial reporting.
• Board reporting.
• Cap table management.
• Investor updates.
• Corporate records.

Good reporting infrastructure gives your company flexibility as it approaches a major financing, acquisition, or IPO.

Don’t Confuse Semiannual Reporting With Less Internal Discipline

This is an important distinction.

Even if public companies eventually receive permission to report financial information twice a year, that does not mean management should stop tracking performance closely.

Your internal financial controls should remain strong.

Your board should still receive the information it needs.

Your investors should still understand how the company is performing.

Never treat lighter public disclosure as a reason to loosen internal controls. Once investor confidence is damaged, rebuilding it can be much harder than maintaining strong reporting discipline from the beginning.

Growth-Stage Companies Should Pay Attention Now

You do not need to be preparing an IPO registration statement today for this issue to matter.

Growth-stage investors are already asking companies how they plan to handle disclosure after going public.

If your company expects to pursue an IPO within the next one to three years, this becomes even more relevant.

Your reporting systems should be flexible enough to support whichever framework ultimately applies.

That is much easier than waiting until an IPO is approaching and discovering that your financial and governance processes need a complete overhaul.

Common Founder Mistakes

• Assuming “we’re not public yet” means the issue is irrelevant: Growth-stage investors may already ask about your future disclosure strategy, particularly when an IPO is part of the company’s long-term plan.
• Treating semiannual reporting as permission to reduce internal financial discipline: Less frequent public reporting would not eliminate the need for accurate financial information, strong controls, or effective board reporting.
• Building reporting systems around only one cadence: Systems designed exclusively for quarterly or semiannual reporting may require expensive rework if investor expectations or SEC requirements change.
• Assuming the SEC proposal is already final: The proposal remains a contested rulemaking process, so founders should avoid making long-term decisions based on a rule that has not yet been finalized.

10-Minute Reporting Strategy Self Check

• Can I explain how my company would report to public shareholders if we had to do it today?
• Have my current investors asked about our expected disclosure cadence after an IPO?
• Can our reporting systems support either quarterly or semiannual reporting?
• Does our board receive reliable financial and operating information?
• Have we maintained strong financial controls even while the company remains private?
• Do I know the current status of the SEC proposal rather than assuming the rule has already changed?
• Have I discussed our future reporting strategy with counsel as part of our exit planning?

If you cannot answer yes to all of these, your reporting infrastructure isn’t ready for whichever way this rule lands.

Bottom Line

The SEC’s proposal to allow optional semiannual reporting is still being debated, so founders should not treat it as settled law. But the debate itself provides an important lesson: reporting cadence affects investor confidence, valuation, and diligence well before a company becomes public.

Build your financial, board, and governance infrastructure so it can support either quarterly or semiannual reporting. Maintaining strong reporting discipline now gives you more flexibility later and reduces the risk of rebuilding critical systems when an IPO, acquisition, or major financing is already on the horizon.

Want to Build a Reporting Strategy That Holds Up Under Investor Scrutiny?

Join our upcoming Product Launch Master Class, where we cover the legal and operational issues founders should address before launch, explain the documents investors and customers may expect as the company grows, and help you build a stronger foundation for future fundraising and exit planning.

Register now: https://primumlaw.com/product-launch-master-class/