Thu.Nov 15, 2012

Gust

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What are the regulatory barriers preventing the emergence of a liquid market for equity in seed stage startups?

Gust

Parts of the answer are that (a) there are enormous regulatory requirements relating to secondary markets, and (b) there are no analysts tracking private company stocks. But by far the biggest issue is that the very essence of public markets (and what makes them “public”) is that the SEC mandates an enormous amount of transparency, including complete quarterly financial statements, complete publication of the company’s cap table including all significant shareholders, and so fo