February 19, 2015
The JOBS Act and the Billion Dollar Startup Club
Posted by Usha Rodrigues

The WSJ has launched the Billion Dollar Startup Club, which tracks venture-backed private firms valued at over $1 billion.  I am getting crotchety in my old age, and view the fact that 73 companies fall into this category as a sign of extreme and unsustainable froth. After all, only 35 firms topped $1 billion in the dot-com bubble (adjusted for inflation).

For me these billion-dollar startups are a product of the JOBS Act's schizophrenia. On the on hand, Title I created the emerging growth companies that made it easier to go public.  Because that's what we want, right? More public companies?  But simultaneously Titles II, IV, and V made it easier for companies to stay private.  Because that's what we want, right?  For private firms to be able to raise money more easily and stay private longer? Hence the schizophrenia: the JOBS Act isn't sure what it wants, but it wants companies to be able to do it easier, whatever it is.

Now I sound like a hater, and I'm not.  I just find it interesting that, for all of the talk of the need to make U.S. capital markets more amenable to new public companies, more and more VC-backed firms are staying private even with sky-high valuations.

Also, get off my lawn.

Entrepreneurs, Entrepreneurship, IPOs, JOBS Act, Venture Capital | Bookmark

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