Welcome to the Lost Decade (for Entrepreneurs, IPOs, and VCs)

Re:Welcome to the Lost Decade (for Entrepreneurs, IPOs, and ... by _delirium on Thursday July 15, 2010 @03:39PM (#1518901)

They're not irrelevant, but we're seeing a margin much bigger than they could account for. If there were companies that today could exit with 1990s-style $500m IPOs, I don't think they would walk away from them because of SOX. They're not having those IPOs because there are very few companies today that could convince investors to pay $500m for their stock.

Those who do have a business model, outlook, and revenues that makes them attractive, like Google, can and do still IPO successfully, but there aren't many of them.

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Re:Welcome to the Lost Decade (for Entrepreneurs, IPOs, and ... by gojomo on Friday July 16, 2010 @05:09AM (#1520706)

I agree that SOX alone is not enough to explain the dearth of IPOs. A least for 2008-2010, the housing/financial crash seems a much bigger culprit.

At the margin, though, SOX's costs cause private companies to delay going public, and provide a relative advantage to older/larger/already-public companies -- acquirers -- for whom compliance costs are proportionately smaller.

And since the cycle of IPOs depends on emulating prior successes, even a small initial effect could depress the follow-on rate for years.

Google is sui generis, the most successful venture-backed company of the past 30 years. If being 'like Google' is the yardstick to IPO, the system is seriously broken.

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