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Making IPOs Easier

Published: 12/5/2011 10:10:28 AM

A bipartisan bill has been introduced in the Senate that purports to make it easier for small and medium-sized companies to go public.

Sponsored by Republican Pat Toomey and Democrat Charles Schumer, the bill would reduce regulatory requirements and costs, thereby supposedly reducing the hurdle to an IPO.

I have to say that I'm in the camp of Jim Breyer of Accel Partners who says that we don't necessarily need "more IPOs".

At VentureDeal, we've done research that indicates that the performance of companies after they've IPO'd over the past 18 months has been poor when compared to the S&P 500 during the same period of time.

Many of these companies are unable to get analyst coverage due to structural issues in the research side of the financial services business. Unless they are an extremely high-visibility company, the firm may not be served by going public, if their shares simply languish in a publicly-held "ghetto".

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Don Jones
CEO, VentureDeal

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