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I would guess that its a combination of Sarbanes-Oxley and the glut of private capital available.

• beefman 10y ago
  Is there a good explanation of the Sarbanes-Oxley issue somewhere? I tend to doubt procedural stuff like that could really be responsible.
  • ksdale 10y ago
    I don't know of any good resources off the top of my head, but IIRC from law school, one of the main objectives of Sarbanes-Oxley is to get executives on the hook for the accuracy of the financial statements they sign, and I believe it also requires that they sign the financial statements. I don't know enough to have an opinion about whether it's affecting IPO decisions, but I think it's more than just procedural stuff.
  • nradov 10y ago
    Sarbanes-Oxley isn't solely responsible but it's one factor weighing on the scales. There is extra administrative overhead which costs real money, plus it exposes the company's leaders to more potential liability. The bill was well intentioned. But it has had the unintended side effect of locking retail investors out of many of the highest returning investments. There is overall a shrinking number of companies publicly traded on US markets as more companies merge, go bankrupt, go private, or never go public in the first place. This is a growing problem for defined-contribution retirement plans.
    • princeb 10y ago
      > locking retail investors out of many of the highest returning investments maybe there's a narrative that by preventing retail investors from investing in high return investments they have also protected retail investors from high-risk investments (if we believe the returns are proper risk premia!)