6 ms·

Oh come on, a lot of good companies stay private bc the SEC makes it a pain in the ass (and expensive) to be public. And it's making it worse with stupid shit l

Oh come on, a lot of good companies stay private bc the SEC makes it a pain in the ass (and expensive) to be public. And it's making it worse with stupid shit like ESG reporting or SOX compliance they just keep adding. And these days you run the risk of some social justice warrior micro fund buying 2 shares going to CALSTRS or whatever and running a proxy fight. I would not want to take a company public these days and I don't see problems with companies staying privately held. PE LPs are all accredited and know what they're doing, they're betting on a greater fool buying for a higher multiple later bc it worked for the past years, multiples kept rising. Blame the fed, blame congress, blame stupid people who somehow got money. Now people complain bc there's a downturn. I don't know how people are unironically painting them as victims.

lovich 4y ago
> And these days you run the risk of some social justice warrior micro fund buying 2 shares going to CALSTRS or whatever and running a proxy fight. I would not want to take a company public these days and I don't see problems with companies staying privately held. If you’ve reached the size of being a public company, lawsuits are a Tuesday. If the flavor of the frivolous is driving executives and investors decision making, then it’s a cultural choice. > Oh come on, a lot of good companies stay private bc the SEC makes it a pain in the ass (and expensive) to be public. And it's making it worse with stupid shit like ESG reporting or SOX compliance they just keep adding. It does make it a pain but it also increases the trust investment has in your company to not do things like trade assets between two vehicles you control with no proof that it’s not to your benefit Generally agree that these aren’t victims though. To borrow a term from Eve, it seems like they decide to venture into null sec space and are surprised they could get hurt
- 1123581321 4y ago
  It used to be more manageable to go public before becoming the size where lawsuits and legal fees mean nothing, is the point.
- collegeburner 4y ago
  Proxy fights are worse than lawsuits. Lawsuits cost money and waste lawyers time, but proxy fights waste the board and executives time and distract them from running the company. Also if you want more companies to be public than this is a bad argument. Also these deals arent suffering from a "lack of transparency". The LPs know exactly what they're doing, they're literally marketed as continuation funds. You really can't complain about high net worth individuals or institutional investors getting "taken advantage of" like you can with some random guy investing his 401k in the public markets. Smh.
pm90 4y ago
SOX compliance is a huge PITA but has driven engineering changes that have made the orgs Ive worked at much more secure. In particular, rules that require code reviews, auditing around production deployments, regular patching and exercising backup/recovery mechanisms have all made the systems Ive worked on operationally resilient. It does depend on what kind of expertise your compliance team has (or the 3rd party tool you might use). But followed in spirit, SOX regulations have probably been a net benefit.
- blowski 4y ago
  I thought SOX was mostly financial. What you’re saying here sounds more like SOC. are they connected?
  - pm90 4y ago
    You can think of SOX as RFC and SOC2 as an implementation of it. https://www.logicgate.com/blog/a-comparison-of-soc-and-sox-compliance/ https://www.logicgate.com/blog/a-comparison-of-soc-and-sox-c...
    - solar-ice 4y ago
      SOC 2 is the bit that changes how software development is done, and has literally nothing to do with SOX, even according to that article.
    - collegeburner 4y ago
      There is literally 0 requirement to implement SOC2 for SOX. They are not related at all aside from that a lot of organizations do both. I'm kinda curious now where you got this idea?
RC_ITR 4y ago
> PE LPs are all accredited and know what they're doing Lol. Who’s accrediting them? 9/10 can’t make a 3-statement that foots.
- wikfwikf 4y ago
  An accredited investor is one who has a certain amount of wealth, apart from their main residence. The SEC lays down the definition. You need to be an accredited investor to invest, as an individual, in hedge funds, private equity, and some other similar things.
  - deleted 4y ago
    [deleted]
  - RC_ITR 4y ago
    Yeah, hence the joke. Kim Kardashian is an accredited investor.
- collegeburner 4y ago
  Lmao true for some of the AM guys I've met. But no it's an SEC designation of having a lot of money (so you aren't broke if you lose it) or proven knowledge (new rule so finance professionals who theoretically know what they're doing can invest).
  - deleted 4y ago
    [deleted]
  - nradov 4y ago
    A friend of mine also became an "accredited" investor through the simple expedient of lying on the form. Many financial services companies don't bother to verify investor income and assets.
    - collegeburner 4y ago
      It's not a matter of bothering, the ones that don't do general solicitation or are less than $150mm AUM don't have to actually verify. Which is good because LPs get mad when you ask them for tax returns.

lovich 4y ago

> And these days you run the risk of some social justice warrior micro fund buying 2 shares going to CALSTRS or whatever and running a proxy fight. I would not want to take a company public these days and I don't see problems with companies staying privately held. If you’ve reached the size of being a public company, lawsuits are a Tuesday. If the flavor of the frivolous is driving executives and investors decision making, then it’s a cultural choice. > Oh come on, a lot of good companies stay private bc the SEC makes it a pain in the ass (and expensive) to be public. And it's making it worse with stupid shit like ESG reporting or SOX compliance they just keep adding. It does make it a pain but it also increases the trust investment has in your company to not do things like trade assets between two vehicles you control with no proof that it’s not to your benefit Generally agree that these aren’t victims though. To borrow a term from Eve, it seems like they decide to venture into null sec space and are surprised they could get hurt

1123581321 4y ago
It used to be more manageable to go public before becoming the size where lawsuits and legal fees mean nothing, is the point.
collegeburner 4y ago
Proxy fights are worse than lawsuits. Lawsuits cost money and waste lawyers time, but proxy fights waste the board and executives time and distract them from running the company. Also if you want more companies to be public than this is a bad argument. Also these deals arent suffering from a "lack of transparency". The LPs know exactly what they're doing, they're literally marketed as continuation funds. You really can't complain about high net worth individuals or institutional investors getting "taken advantage of" like you can with some random guy investing his 401k in the public markets. Smh.

pm90 4y ago

SOX compliance is a huge PITA but has driven engineering changes that have made the orgs Ive worked at much more secure. In particular, rules that require code reviews, auditing around production deployments, regular patching and exercising backup/recovery mechanisms have all made the systems Ive worked on operationally resilient. It does depend on what kind of expertise your compliance team has (or the 3rd party tool you might use). But followed in spirit, SOX regulations have probably been a net benefit.

blowski 4y ago
I thought SOX was mostly financial. What you’re saying here sounds more like SOC. are they connected?
- pm90 4y ago
  You can think of SOX as RFC and SOC2 as an implementation of it. https://www.logicgate.com/blog/a-comparison-of-soc-and-sox-compliance/ https://www.logicgate.com/blog/a-comparison-of-soc-and-sox-c...
  - solar-ice 4y ago
    SOC 2 is the bit that changes how software development is done, and has literally nothing to do with SOX, even according to that article.
  - collegeburner 4y ago
    There is literally 0 requirement to implement SOC2 for SOX. They are not related at all aside from that a lot of organizations do both. I'm kinda curious now where you got this idea?

RC_ITR 4y ago

> PE LPs are all accredited and know what they're doing Lol. Who’s accrediting them? 9/10 can’t make a 3-statement that foots.

wikfwikf 4y ago
An accredited investor is one who has a certain amount of wealth, apart from their main residence. The SEC lays down the definition. You need to be an accredited investor to invest, as an individual, in hedge funds, private equity, and some other similar things.
- deleted 4y ago
  [deleted]
- RC_ITR 4y ago
  Yeah, hence the joke. Kim Kardashian is an accredited investor.
collegeburner 4y ago
Lmao true for some of the AM guys I've met. But no it's an SEC designation of having a lot of money (so you aren't broke if you lose it) or proven knowledge (new rule so finance professionals who theoretically know what they're doing can invest).
- deleted 4y ago
  [deleted]
- nradov 4y ago
  A friend of mine also became an "accredited" investor through the simple expedient of lying on the form. Many financial services companies don't bother to verify investor income and assets.
  - collegeburner 4y ago
    It's not a matter of bothering, the ones that don't do general solicitation or are less than $150mm AUM don't have to actually verify. Which is good because LPs get mad when you ask them for tax returns.