4 ms·
Who is to blame for failed IPO's? Sarbanes and Oxley. Startups don't want to deal with all the red tape of the Sarbanes-Oxley Act [1] and are putting off goin
by csense 14y ago
Who is to blame for failed IPO's?
Sarbanes and Oxley.
Startups don't want to deal with all the red tape of the Sarbanes-Oxley Act [1] and are putting off going public until either they're big enough that the cost of compliance is small compared to the total size of their business, or they're legally required to do so because the number of shareholders exceeds some threshold. (Facebook falls in the latter category.)
If your company's large already, it kills growth prospects. It's a lot easier to turn a $40 million company into a $400 million company than it is to turn a $40 billion company like Facebook into a $400 billion company.
[1] http://en.wikipedia.org/wiki/Sarbox http://en.wikipedia.org/wiki/Sarbox
- polarix 14y agoThe article actually hints at this: "We the people have decided that big companies are more responsible when they report to a broad base of shareholders". So, by that logic, we the people are to blame -- for the overhead that fast growing companies now need to avoid by staying private longer.