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While I'm not a fan of Sarbox, I don't think we can simply say that it's going to single-handedly create this two-tiered system. It's not like every private co
by gsibble 13y ago
While I'm not a fan of Sarbox, I don't think we can simply say that it's going to single-handedly create this two-tiered system. It's not like every private company that would have had access to public capital much earlier would have grown 500x. Microsoft and Facebook are the outliers, not the norm. Not to mention that Sarbox has nothing to do with what defines "accredited". Congress can and has changed that definition at will, including raising the limits necessary under the Obama administration due to Dodd Frank.
That said, Sarbox has had so many unintended consequences and resulted in so much destroyed value that I do believe it should be curtailed in one fashion or another.
- hga 13y agoBut you know why they had to use a company like Facebook to make their example? Post-SarBox, which I think was more like the final nails in the coffin vs. "single-handedly", only wild successes like it are able to do IPOs. Legal and regulatory changes in the late '50s created the ecosystem that had IPOs as an ideal exit, and this had a fantastic half-century run ending with SarBox. And since then people are chasing 140 characters instead of flying cars, to paraphrase Peter Thiel. So much destroyed value I'm sure it has more than a little to do with their being no end in sight for the Great Recession.
- muzz 13y agoThey had to pick an outlier as the example, because venture capital returns as a whole are so low that they would contradict the point the author was trying to make. As a whole, VC returns have not beaten simple index fund investing (S&P 500, etc).