This. The public mkt used be the source of capital for companies like Facebook. Now it’s all private until most of the growth juice is squeezed out and now the public mkt is a liquidity event for the private investors. If/when they want to...

Facebook is up almost 500% from its IPO price, so even the very smart private equity and venture folks can misjudge when an opportunity has been completely milked.

Another reason to go public is because the SEC forces companies with 2000 stock owners (used to be 500 pre-2012) to file public disclosure documents similar to being public, so companies typically go public at that point. I’ve heard that some work around this limit by issuing IOUs indexed to the stock price.

https://www.investopedia.com/terms/5/500-shareholder-thresho...

You also can give RSUs, which don't actually become owned by the recipient until the company is acquired or become public. No fancy IOUs required. This IOU is denominated in stock units instead of a cash price.

You’re in agreement with gp- he’s saying that an IPO used to be an opportunity like facebook, but now they just stay private like Uber until they believe most of the value is locked in.

Isn't that because there a more wealthy individuals and many of them are connected to the same network?

Just the same, pub mrkts used to be about companies and investing. Now they're just datasets to be milked and manipulated by quants, automated trading, etc.

Perhaps the better conclusion of the NYT article should have been that these markets no longer carry the economic significance they once did?

OTOH, a lot of companies used to go public that had no business doing so. We went through a period where a lot of normal folks lost big portions of their retirement savings betting on public companies that really shouldn't have been in public markets. Yes, early-stage startups have the potential to return 100x, but they've also got the potential to lose 100%. That's the reason why we have the rules around qualified investors...they're people who are supposed to be in a position where losing their entire investment doesn't cause the kind of impact we were seeing when so many dotcom IPOs failed.

Yes, so punish the 98% who invest responsibly because 2% go ape? I know plenty of people who lost their shirts investing in real estate in the 00's because supposedly that's a "safe" investment that retail investors can be trusted with since there's so many checks and balances. Gimme a break. All investments are risky. Public companies can go bankrupt. Real estate markets can crash. Shit hits the fan. People are either adults and take responsibility for their financial decisions or they're not. The legal distinction between who can buy what assets based on net worth is absolutely ridiculous.

I'm not saying I agree with the current restrictions on accredited investors, but there should be a middle ground between what we have now and what we had back when the dotcoms collapsed the market. Back then, there were stocks so risky they'd make today's ICO investors nervous if they'd been presented honestly. But they were sold as being relatively safe in a way that allowed early-stage investors to foist their failed bets on to the public.

I witnessed first-hand a situation where executives engaged in outright fraud in an effort to kick the can far enough so that the VCs and execs could cash out. The aftermath of that fraud was two scapegoats who were sentenced to 18 months each and had to pay fines of less than 10% of the profit they made from their crime. If you're an individual who invested in the company and lost all your money, then fine...I can see the personal responsibility angle. But most of the losses were mutual funds and pensions where the losses were felt by people who had no hand in choosing that investment. Instead, that was financial professionals and the perverse incentives they're given that push them to seek outsized returns.

There's a very good possibility that we're in an over-regulated state at the moment, but it's important to remember that in the complete absence of regulation, the public gets fleeced. The focus should be on finding the right regulation rather than vilifying the general concept of regulation.

Right, so for one, perhaps requiring a certification course for people to become accredited investors might be a much fairer alternative. The course could cover risks, go over the history of scams, teach people fundamentals of stock valuations, etc. And with this accreditation then one can go invest their own money on startups. That's a reasonable regulation that anyone can satisfy if they feel compelled to.

Nanny state is killing public markets with regulation. The regulatory burden goes only one way- up and up. Only the largest established companies are semi-comfortable with this regime: it sets a barrier to entry. After all, they helped to lobby these regulations. That's all.

Woah woah are you recommending personal responsibility here? Careful.. ;)