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Private Markets and the SEC

Published: 4/11/2011 8:50:59 AM

A recent letter by SEC Commissioner Mary Schapiro seemed to open the door to relaxing the 500 shareholder requirements for private companies to begin issuing public reporting.

Given the generally poor IPO environment over the past several years for technology startups, I am cautiously in favor of this concept.

The result of relaxing the rule would probably be to increase the activity on the secondary or private exchanges, such as SecondMarket or SharesPost. Since those markets are relatively new and somewhat opaque, I would also favor increasing the amount of information that startups need to disclose in order to remove some of the opacity of those markets.

Fred Wilson, a prominent venture capitalist, has a short post on the topic as well.

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Don Jones
CEO, VentureDeal

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