Why IPO’s are Disappearing

As you look closer at the IPO landscape it becomes more and more evident why they are becoming a dying breed.  First of all the regulatory process that a company must go through to become a public company is antiquated.  All of the SEC rules and regulations were written essentially in the 1930’s, almost 80 years ago.  The rules and regulations have not been updated or streamlined to take advantage of information age or Internet.  Also, more than 35 million investors now manage their own accounts at such places as E*TRADE, TD Ameritrade, Schwab and Scottrade.   The broker dealers that are still around do not have the investors they once had to put into IPO’s after they start trading and support the stock.  So we have fewer broker dealers and less access to investors. Not exactly a winning combination to successfully bring your company public. So, knowing this, why would a company invest millions of dollars to go IPO when the chances of success are slim and next to none?  Because they do not realize the landscape has changed dramatically and they are stuck in an old world mentality.

Wouldn’t it make more sense to take your company public through an APO.  You are guaranteed to be public, funded and trading in a short period of time and at a price that is ¼ the price of a traditional IPO.

Ventana Capital Partners (“VCP”) hopes this 20 part series served to better educate you on the alternatives of going public in these very difficult and changing times.  Running your company is challenging enough in today’s financial environment.  Bringing your company public is like running two companies.  If you are considering taking your company public give us a call to discuss the possibilities.  VCP assists companies that want someone to manage the going public process and provide them with the professionals to address all areas of the process.  For further information please call us at 858 729 0075 or email Ralph@ventanacapitalpartners.com

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