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Michael Edwards
Boulder, Colorado, United States
Member since: January 15, 2009
Boulder, Colorado, United States
Member since: January 15, 2009
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Michael's comments (11)
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Brilliant analysis.
on Many banks only insuring $250k again (December 08, 2009)
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I attended this session and some great information was presented.
It's amazing to look at the $8.6MM revenue number Amazon had at it's IPO. It paid $850K vs. $3.5MM to IPO.
Could Amazon have afforded the $3.5MM? What's not in this information is how much cash-on-hand from venture capital they had.
I cannot speak re: actual operating complexities (vs. costs), but I still have not seen a concrete argument why SOX is primarily responsible for the lack of an IPO market at a macro-scale, or even the prevention of IPOs on a micro-scale. In other words, if there was high demand to purchase the stock of a given company the actual costs of SOX compliance seems to be a drop in the bucket compared to the returns an IPO would generate for investors, other stock holders, and the company (for re-investment purposes).
on Sarbanes Oxley small business "Relief" a joke (November 11, 2009)
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Can we get stats to back up the doubled requirements for time and money to get to IPO?
on Congress considering Sarbox relief for SMBs (November 02, 2009)
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Lorenzo, it is great you bring up the risk profile issue. From talking with people that might fit the profile of person to engage these services I've run into a common trend: people don't trust public company stocks anymore. I think there is room to create a strong investment thesis stating that there is an attractive risk profile when you are investing in private company stocks where there are trust worthy / skilled / experienced founders and managers who have not yet made it big enough to be able to defraud people in a way that would ruin their future opportunities. Why not invest in 3 guys from MIT with a $1.5MM Series A behind their belts?
on Is it time for private company marketplaces? (November 01, 2009)
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Awesome look at an emerging niche sector in the finance community and startup ecosystem.
It's pretty clear that there is and should be healthy demand on a low-volume basis. I think the real question being discussed is what the macro longterm impact is. Frankly, there is no reason why private company securities can't be traded in the same way as public company ones. I don't think the secret information issue is a real problem.
The companies that have the most traded stocks will have the ability to draw additional funds out of the investment community, esp in emergency situations. They will grow faster and be more resilient. Their competitors will follow suit.
Keep in mind that most public company SEC filings fail to provide adequate information given the scope, size, and complexities of modern corporations.
A different perspective on this issue is that there is actually low demand for any kind of security, public or private, issued by these companies as evidenced by a lack of a strong IPO market.
Ultimately, lower transaction costs increase the size of secondary and follow-on investment markets for angel and VC backed startups. Being a professional angel becomes easier as paper work and match-making costs are eliminated. Perhaps this trend could turn into a bubble as there are significant amounts of people with this kind of money.
on Is it time for private company marketplaces? (October 28, 2009)
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