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"They note that the average time to IPO is now 11 years vs. 4 in 99, and that the overall number of tech IPOs is plummeting as privately funded companies raise
by randomname2 11y ago
"They note that the average time to IPO is now 11 years vs. 4 in 99, and that the overall number of tech IPOs is plummeting as privately funded companies raise huge late stage private rounds instead."
What part do the increased regulatory requirements for public companies play in this? Might this be one of the unintended consequences of Sarbanes-Oxley?
- tonnesoffun 11y agoYes definitely. Increased regulatory requests means it takes longer and costs more to go public. The Emerging Growth Company Act (EGC) helps this somewhat: companies with < $1b in revenue have less reporting requirements if they file to go public. Most VC-backed companies that do an IPO will leverage this. Clearly, the benefit of staying private (and still being able to raise $100M+ rounds) outweighs the consequences of illiquidity for employees....at least in the eyes of the founders and management.
- tonnesoffun 11y agoYes definitely. Increased regulatory requests means it takes longer and costs more to go public. The Emerging Growth Company Act (EGC) helps this somewhat: companies with < $1b in revenue have less reporting requirements if they file to go public. Most VC-backed companies that do an IPO will leverage this. Clearly, the benefit of staying private (and still being able to raise $100M+ rounds) outweighs the consequences of illiquidity for employees....at least in the eyes of the founders and management.