Facebook. Zynga. Groupon. LinkedIn. Previously, these startups and others would have already gone public. Instead they’re raising megarounds from private investors to give liquidity to founders and early employees.
People usually explain this by pointing to how expensive it is to go public, how annoying it is to stay public, and how cumbersome it is to stay nimble as a public company.
All of these things are true, to a degree, but we shouldn’t forget the big reason why they’re true: government regulations.
There’s no intrinsic reason why going public should be such a nightmare. Instead, the government is fighting the last battle, as always. In the 1990s, when there were too many IPOs, the government made them easy. In the 2000s, when there weren’t enough, it made them harder.
Of course, there are some things that will always be annoying about being a public company: transparency, quarterly targets, investors with the attention span of a hummingbird.
But those pining for a new wave of tech IPO should not forget who the real culprit is.