The summary of the Stulz's article that is the source of this article[1] left me with a new insight into one factor why, in the current system, the companies wi

The summary of the Stulz's article that is the source of this article[1] left me with a new insight into one factor why, in the current system, the companies with the highest growth potential (tech) don't IPO early. Sommer's article tries to leave me worrying about the decline of democracy. Unfortunately this worry is constantly repeated and is nothing new or useful for me. [1]http://www.nber.org/reporter/2018number2/stulz.html http://www.nber.org/reporter/2018number2/stulz.html Making Sense of the Changes The changes in public firms likely hold the key to understanding why the number of public firms has fallen so much. Participating in public markets is not as beneficial for firms that invest in intangibles as it is for firms that invest in fixed assets, especially when these firms are small and young. If a firm builds a recognizable product and requires capital to expand its production, it is relatively straightforward for it to explain to potential investors how their money will be put to use. As the firm explains its needs, it does not endanger its ownership of its assets. It is rather difficult to steal a firm's plants. If a firm invests in intangibles, it is much more difficult for its management to convince investors that it will make good use of its money. If the firms give too much detail, which they could be forced to do by disclosure laws if public, their competitors can use the information. If they give too little detail, investors will pay little for their shares. It is not surprising, therefore, that for such firms, participation in public markets with their disclosure requirements is likely to be onerous. It is much easier for such firms to provide detailed information to a handful of private equity investors who have specialized knowledge that enables them to assess a firm's investments in intangibles. This evolution of firms and of markets has many implications. Many of these implications have yet to be investigated.