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.
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.