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In very layman's terms (best I can do right now): 1. Going public now requires months and months more of extra accounting due dilligence, audits, etc. that wil

In very layman's terms (best I can do right now): 1. Going public now requires months and months more of extra accounting due dilligence, audits, etc. that will cost millions upon millions of dollars. 2. Now that you're a public company most of the executives and especially the CFO are severely, criminally liable for any accounting fraud that happens in the organization regardless of whether they knew anything about it. SOX was a reaction (over-reaction) to the Enron and Worldcom disasters where accounting fraud took down huge public companies, destroyed thousands of jobs, and cost billions of dollars. And the executives just claimed they didn't know anything when they obviously did. So now theres extra audits, execs are liable regardless, and nobody wants to go public anymore.

imnotsosure 16y ago
Has it ever occurred to you that many companies might choose to stay private in part because it offers advantages over an IPO, even ignoring SOX? A few examples: - Better alignment of company and investor - Better prices for company - Less risk if price is rejected by investor means it's easier to maximize value - More control over company fate Honestly, if you gave me equal cost options for private and public investment, I'd lean strongly towards private because of the strategic flexibility it offers. I'd really only look to IPO if the amount of capital I was looking to raise was absolutely enormous and there was reason to believe that diverse ownership was better than having strategically chosen investors, and that's true with or without SOX. The growth of VC and PE means that it's more viable than it used to be, so it happens more often.