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You can thank Sarbanes-Oxley for this. Edit: For further context: It used to be that a technology company could go public and provide an exit to investors. Af

You can thank Sarbanes-Oxley for this. Edit: For further context: It used to be that a technology company could go public and provide an exit to investors. After the dot com crash, Sarbanes-Oxley regulations made it much more difficult to IPO. It has many administrative requirements, greatly increases run rate to support and raises the finanical bar significantly to which companies can go IPO. The VC model however remains the same, they need 10X returns. Thus you see them pushing entrepreneurs to go IPO which post-SO means a longer runway to exit fraught with a lot of risk mostly placed on the entrepreneurs (compared to pre-SO). It became a rational choice for the founders to take smaller, faster exits since "the big one" (IPO) now looks less certain for all but the most successful startups.

CalChris 8y ago
That is a reasonable take but then you can also blame Sarbanes-Oxley on the likes of pets.com. SO is 2002 and while it was unquestionably a reaction to the dot com era and bust, it was also a reaction to Enron and others. Hell, it was passed and signed in the Bush administration. Yeah, SO raised the bar to get into (and stay in) the public markets. Maybe regulation minded Congress had a point there. In any case, this correction didn't prevent private MA. Moreover, VCs still get their funds funded. So SO hasn't killed any golden gooses. Maybe we should have corrected something in 2008. We certainly un-corrected Glass-Steagall in 1999.