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	<title>Comments on: Our innovation economy won&#8217;t grow until we fix the broken IPO market</title>
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	<link>http://gigaom.com/2013/03/02/our-innovation-economy-wont-grow-until-we-fix-the-broken-ipo-market/</link>
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	<lastBuildDate>Wed, 19 Jun 2013 14:05:08 +0000</lastBuildDate>
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		<title>By: Kris Tuttle</title>
		<link>http://gigaom.com/2013/03/02/our-innovation-economy-wont-grow-until-we-fix-the-broken-ipo-market/#comment-1318083</link>
		<dc:creator><![CDATA[Kris Tuttle]]></dc:creator>
		<pubDate>Thu, 07 Mar 2013 08:11:05 +0000</pubDate>
		<guid isPermaLink="false">http://gigaom.com/?p=615959#comment-1318083</guid>
		<description><![CDATA[I&#039;ve been studying this for over 10 years and can say that the IPO market is not the problem. It&#039;s fairly easy for a company to do an IPO today for less than $100,000. 

It&#039;s true that understanding and managing the outside investor process is critical and hard to find good *institutional quality* solutions to get the job done. (I agree that the primary job of the CEO is to build the company and create returns for equity holders.)

Recently there&#039;s been some decent traction for companies on platforms like CircleUp and some other founding platforms and I suspect there will be more. 

What&#039;s missing is long-term investing. The public markets are totally dominated by short-term trading. For many reasons most people with money seem to shun any investment that will take 3, 4, 5 or even 10 years to pay off but then may offer 10x or 100x returns.

Incentives like tax benefits could be a big spur for these types of long-term investments in smaller, innovative companies. That&#039;s a big economic driver that should be used now. A few tax incentives could shift a few percent of investable assets to this investment class and companies could get funded and grow then the successful ones trade on a platform like SecondMarket or SharesPost/Nasdaq before moving on to larger more liquid markets if they continue to grow. 

The last factor to realize is that many of these companies will fail. Just as we already see on Kickstarter. It&#039;s hard to build products and services, ship them, support them and grow. Investors in these companies lose 100% of their money. Like casinos people should be allowed in but the risks need to be understood and the market monitored for fraud.]]></description>
		<content:encoded><![CDATA[<p>I&#8217;ve been studying this for over 10 years and can say that the IPO market is not the problem. It&#8217;s fairly easy for a company to do an IPO today for less than $100,000. </p>
<p>It&#8217;s true that understanding and managing the outside investor process is critical and hard to find good *institutional quality* solutions to get the job done. (I agree that the primary job of the CEO is to build the company and create returns for equity holders.)</p>
<p>Recently there&#8217;s been some decent traction for companies on platforms like CircleUp and some other founding platforms and I suspect there will be more. </p>
<p>What&#8217;s missing is long-term investing. The public markets are totally dominated by short-term trading. For many reasons most people with money seem to shun any investment that will take 3, 4, 5 or even 10 years to pay off but then may offer 10x or 100x returns.</p>
<p>Incentives like tax benefits could be a big spur for these types of long-term investments in smaller, innovative companies. That&#8217;s a big economic driver that should be used now. A few tax incentives could shift a few percent of investable assets to this investment class and companies could get funded and grow then the successful ones trade on a platform like SecondMarket or SharesPost/Nasdaq before moving on to larger more liquid markets if they continue to grow. </p>
<p>The last factor to realize is that many of these companies will fail. Just as we already see on Kickstarter. It&#8217;s hard to build products and services, ship them, support them and grow. Investors in these companies lose 100% of their money. Like casinos people should be allowed in but the risks need to be understood and the market monitored for fraud.</p>
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		<title>By: mona-defrawi</title>
		<link>http://gigaom.com/2013/03/02/our-innovation-economy-wont-grow-until-we-fix-the-broken-ipo-market/#comment-1317810</link>
		<dc:creator><![CDATA[mona-defrawi]]></dc:creator>
		<pubDate>Wed, 06 Mar 2013 02:48:52 +0000</pubDate>
		<guid isPermaLink="false">http://gigaom.com/?p=615959#comment-1317810</guid>
		<description><![CDATA[Ellie - Thanks for your thoughtful comments -- and please allow me to correct any misperceptions:

1. In no way am I requesting changes in trading practices or calling for more regulations. In fact the very opposite: I am trying to make company CEOs aware that they can control much in their IPO process. They can &quot;structure the financial markets to reward long-term success&quot; by ensuring that the majority of their shareholder base (60-70%) are long-term growth investors with that style of investing. They will price the company based on its ability to create this growth. At this ratio, both stability in valuation and liquidity in trading are promoted in a way that offers a price attached to fundamentals. Free markets...No requested regulations.

2. There is no falling back to the old order, but we also don&#039;t have to be victims of the new order simply because we don&#039;t understand how our own stocks trade and allow those controlling the transactions to align it towards their own incentives above our own. CEOs must take back their control over their own transactions. I spent 10 years helping 4 companies go public and trade in the aftermarkets. There is a ton companies can do to market their opportunities, but stocks are complex and long-term investors cannot invest in that which they do not understand - so financial communications and marketing are key to managing your stock&#039;s trading especially in today&#039;s HFT markets which are allogrithm driven and often fundamentals-agnostic.

3. In my vision, having more strong companies on the public exchanges will give even HFT managers more to trade and a stronger economy giving birth to more opportunities. Everyone should win.]]></description>
		<content:encoded><![CDATA[<p>Ellie &#8211; Thanks for your thoughtful comments &#8212; and please allow me to correct any misperceptions:</p>
<p>1. In no way am I requesting changes in trading practices or calling for more regulations. In fact the very opposite: I am trying to make company CEOs aware that they can control much in their IPO process. They can &#8220;structure the financial markets to reward long-term success&#8221; by ensuring that the majority of their shareholder base (60-70%) are long-term growth investors with that style of investing. They will price the company based on its ability to create this growth. At this ratio, both stability in valuation and liquidity in trading are promoted in a way that offers a price attached to fundamentals. Free markets&#8230;No requested regulations.</p>
<p>2. There is no falling back to the old order, but we also don&#8217;t have to be victims of the new order simply because we don&#8217;t understand how our own stocks trade and allow those controlling the transactions to align it towards their own incentives above our own. CEOs must take back their control over their own transactions. I spent 10 years helping 4 companies go public and trade in the aftermarkets. There is a ton companies can do to market their opportunities, but stocks are complex and long-term investors cannot invest in that which they do not understand &#8211; so financial communications and marketing are key to managing your stock&#8217;s trading especially in today&#8217;s HFT markets which are allogrithm driven and often fundamentals-agnostic.</p>
<p>3. In my vision, having more strong companies on the public exchanges will give even HFT managers more to trade and a stronger economy giving birth to more opportunities. Everyone should win.</p>
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		<title>By: mona-defrawi</title>
		<link>http://gigaom.com/2013/03/02/our-innovation-economy-wont-grow-until-we-fix-the-broken-ipo-market/#comment-1317807</link>
		<dc:creator><![CDATA[mona-defrawi]]></dc:creator>
		<pubDate>Wed, 06 Mar 2013 02:35:31 +0000</pubDate>
		<guid isPermaLink="false">http://gigaom.com/?p=615959#comment-1317807</guid>
		<description><![CDATA[1. Create an IPO on-Ramp by getting to know your long-term growth investors years pre-IPO, and then doing a PIPO round (Public Investors in Private Offerings) a year or two pre-IPO. This vets and values the company by conservative investors aligned with long-term value creation for our companies -- and creates more trust in the valuation than current practices. (see: equidity.com/infographic)

2. Offer a platform that mimics SEC regulated disclosure for private market transactions to facilitate the above: allows visibility broadly across industries; transparencies through virtual data room controlled information sharing; and direct access to management. Screen and select the best companies and investors only for participation, to increase confidence and stimulate research and deal making. (see equidity.com)

3. Educate the public - And our legislators who are the guardians of our economic growth -- to understand that we are in a new economic growth cycle for our Entrepreneurship Economy, and this growth depends on IPOs to bring the next great job creators to the public markets. 92% of job growth occurs post-IPO. If we don&#039;t address these issues, we will continue to have flat or very slow growth and unemployment for another 10 years. If we understand how we are evolving economically, then we can create the proper regulations, taxation, etc. to promote the best growth and opportunities for our country.

How&#039;s that for a start?]]></description>
		<content:encoded><![CDATA[<p>1. Create an IPO on-Ramp by getting to know your long-term growth investors years pre-IPO, and then doing a PIPO round (Public Investors in Private Offerings) a year or two pre-IPO. This vets and values the company by conservative investors aligned with long-term value creation for our companies &#8212; and creates more trust in the valuation than current practices. (see: equidity.com/infographic)</p>
<p>2. Offer a platform that mimics SEC regulated disclosure for private market transactions to facilitate the above: allows visibility broadly across industries; transparencies through virtual data room controlled information sharing; and direct access to management. Screen and select the best companies and investors only for participation, to increase confidence and stimulate research and deal making. (see equidity.com)</p>
<p>3. Educate the public &#8211; And our legislators who are the guardians of our economic growth &#8212; to understand that we are in a new economic growth cycle for our Entrepreneurship Economy, and this growth depends on IPOs to bring the next great job creators to the public markets. 92% of job growth occurs post-IPO. If we don&#8217;t address these issues, we will continue to have flat or very slow growth and unemployment for another 10 years. If we understand how we are evolving economically, then we can create the proper regulations, taxation, etc. to promote the best growth and opportunities for our country.</p>
<p>How&#8217;s that for a start?</p>
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		<title>By: bob</title>
		<link>http://gigaom.com/2013/03/02/our-innovation-economy-wont-grow-until-we-fix-the-broken-ipo-market/#comment-1317743</link>
		<dc:creator><![CDATA[bob]]></dc:creator>
		<pubDate>Tue, 05 Mar 2013 20:34:57 +0000</pubDate>
		<guid isPermaLink="false">http://gigaom.com/?p=615959#comment-1317743</guid>
		<description><![CDATA[You last sentence sounds great. How do you propose we get there?]]></description>
		<content:encoded><![CDATA[<p>You last sentence sounds great. How do you propose we get there?</p>
]]></content:encoded>
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		<title>By: mona-defrawi</title>
		<link>http://gigaom.com/2013/03/02/our-innovation-economy-wont-grow-until-we-fix-the-broken-ipo-market/#comment-1317724</link>
		<dc:creator><![CDATA[mona-defrawi]]></dc:creator>
		<pubDate>Tue, 05 Mar 2013 18:39:13 +0000</pubDate>
		<guid isPermaLink="false">http://gigaom.com/?p=615959#comment-1317724</guid>
		<description><![CDATA[Bingo!
...and that much of the control is actually in THEIR hands -- and their activities can create counter balances for the market structures to properly re-align results. They don&#039;t need regulation to fix this for them. And everyone wins with long-term success!]]></description>
		<content:encoded><![CDATA[<p>Bingo!<br />
&#8230;and that much of the control is actually in THEIR hands &#8212; and their activities can create counter balances for the market structures to properly re-align results. They don&#8217;t need regulation to fix this for them. And everyone wins with long-term success!</p>
]]></content:encoded>
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		<title>By: mona-defrawi</title>
		<link>http://gigaom.com/2013/03/02/our-innovation-economy-wont-grow-until-we-fix-the-broken-ipo-market/#comment-1317723</link>
		<dc:creator><![CDATA[mona-defrawi]]></dc:creator>
		<pubDate>Tue, 05 Mar 2013 18:37:17 +0000</pubDate>
		<guid isPermaLink="false">http://gigaom.com/?p=615959#comment-1317723</guid>
		<description><![CDATA[Bingo!
...and that much of the control is actually in THEIR hands, not just their bankers or &quot;the market&quot; at large.]]></description>
		<content:encoded><![CDATA[<p>Bingo!<br />
&#8230;and that much of the control is actually in THEIR hands, not just their bankers or &#8220;the market&#8221; at large.</p>
]]></content:encoded>
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		<title>By: mona-defrawi</title>
		<link>http://gigaom.com/2013/03/02/our-innovation-economy-wont-grow-until-we-fix-the-broken-ipo-market/#comment-1317720</link>
		<dc:creator><![CDATA[mona-defrawi]]></dc:creator>
		<pubDate>Tue, 05 Mar 2013 18:35:02 +0000</pubDate>
		<guid isPermaLink="false">http://gigaom.com/?p=615959#comment-1317720</guid>
		<description><![CDATA[Going public at hyped valuations and lying are &quot;Broken&quot; in my book! 
The real crime is that these corrupt and greedy practices have our new Innovation economy held hostage, not able to grow or create jobs, while we try to figure out this mess. Most don&#039;t even realize this is the problem...Time for an evolved IPO process that brings rationality, truth through transparency, and growth for all of us again.]]></description>
		<content:encoded><![CDATA[<p>Going public at hyped valuations and lying are &#8220;Broken&#8221; in my book!<br />
The real crime is that these corrupt and greedy practices have our new Innovation economy held hostage, not able to grow or create jobs, while we try to figure out this mess. Most don&#8217;t even realize this is the problem&#8230;Time for an evolved IPO process that brings rationality, truth through transparency, and growth for all of us again.</p>
]]></content:encoded>
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		<title>By: mona-defrawi</title>
		<link>http://gigaom.com/2013/03/02/our-innovation-economy-wont-grow-until-we-fix-the-broken-ipo-market/#comment-1317718</link>
		<dc:creator><![CDATA[mona-defrawi]]></dc:creator>
		<pubDate>Tue, 05 Mar 2013 18:32:45 +0000</pubDate>
		<guid isPermaLink="false">http://gigaom.com/?p=615959#comment-1317718</guid>
		<description><![CDATA[Thanks for your thoughtful and informative comments Ellie. Please allow me to respond and correct any misunderstandings, perhaps created by the 600 word limitation.

- Please keep in mind that global job growth also channels back greater profits to the US based companies which directly improves economic growth here. Many US jobs have also been created, and they tend to be the higher paying jobs that have three times the multiplier effect of manufacturing jobs (per Dr. Moretti&#039;s The New Geography of Jobs, 2012.)

- The US economy has evolved from being primarily manufacturing driven into an Innovation Economy. If you look back 20 years to see where most of the jobs have come from in America, it is from these entrepreneurial companies, including Starbuck&#039;s 700K jobs, which innovated coffee or in the words of their mission &quot;To inspire and nurture the human spirit&quot;. America doesn&#039;t yet realize that its economy has matured and in its next evolution cycle, and our regulations and awareness are sorely lacking the ability to nurture our future growth as clearly evidenced by our flat numbers for over 12 years now (minus the artificial real estate bubble and chasm).

- I am not faulting our President, whom I support in his efforts, but wish that he could realize manufacturing could grow at a much higher rate, when the core part of the economy grows first - through the high growth innovative companies capable of delivering 3 times the middle class jobs he seeks.

- You are correct that I was referring to late-stage, pre-IPO company CEOs who would be the ones concerned with IPO aftermarket trading. And yes, Palantir is one of the terrific companies nominated for the GrowthSTARS Awards my company has sponsored to help America become aware of where it&#039;s next growth jobs and growth is coming from. Studies have shown that 92% of job growth occurs post-IPO, so to grow jobs, we must ensure strong IPOs again. 

-And I agree with you wholeheartedly that greed is the greater culprit, and don&#039;t blame  Sarbox or excessive regulation or even argue that they should be removed in the least. However, I am trying to inform late-stage CEOs that due to the regulations and many other structural changes in the markets, they cannot believe that they can use the traditional IPO process and expect different results from the poor ones we&#039;ve seen over the past decade. We must apply new strategies and evolve the IPO process. IR strategies are commonsensical, powerful and work.

- I too, would be thrilled to hear what Peter Thiel thinks about evolving the IPO process, and perhaps he can comment on my &quot;IPO Evolution&quot;  available on my website, www.equidity.com/infographic]]></description>
		<content:encoded><![CDATA[<p>Thanks for your thoughtful and informative comments Ellie. Please allow me to respond and correct any misunderstandings, perhaps created by the 600 word limitation.</p>
<p>- Please keep in mind that global job growth also channels back greater profits to the US based companies which directly improves economic growth here. Many US jobs have also been created, and they tend to be the higher paying jobs that have three times the multiplier effect of manufacturing jobs (per Dr. Moretti&#8217;s The New Geography of Jobs, 2012.)</p>
<p>- The US economy has evolved from being primarily manufacturing driven into an Innovation Economy. If you look back 20 years to see where most of the jobs have come from in America, it is from these entrepreneurial companies, including Starbuck&#8217;s 700K jobs, which innovated coffee or in the words of their mission &#8220;To inspire and nurture the human spirit&#8221;. America doesn&#8217;t yet realize that its economy has matured and in its next evolution cycle, and our regulations and awareness are sorely lacking the ability to nurture our future growth as clearly evidenced by our flat numbers for over 12 years now (minus the artificial real estate bubble and chasm).</p>
<p>- I am not faulting our President, whom I support in his efforts, but wish that he could realize manufacturing could grow at a much higher rate, when the core part of the economy grows first &#8211; through the high growth innovative companies capable of delivering 3 times the middle class jobs he seeks.</p>
<p>- You are correct that I was referring to late-stage, pre-IPO company CEOs who would be the ones concerned with IPO aftermarket trading. And yes, Palantir is one of the terrific companies nominated for the GrowthSTARS Awards my company has sponsored to help America become aware of where it&#8217;s next growth jobs and growth is coming from. Studies have shown that 92% of job growth occurs post-IPO, so to grow jobs, we must ensure strong IPOs again. </p>
<p>-And I agree with you wholeheartedly that greed is the greater culprit, and don&#8217;t blame  Sarbox or excessive regulation or even argue that they should be removed in the least. However, I am trying to inform late-stage CEOs that due to the regulations and many other structural changes in the markets, they cannot believe that they can use the traditional IPO process and expect different results from the poor ones we&#8217;ve seen over the past decade. We must apply new strategies and evolve the IPO process. IR strategies are commonsensical, powerful and work.</p>
<p>- I too, would be thrilled to hear what Peter Thiel thinks about evolving the IPO process, and perhaps he can comment on my &#8220;IPO Evolution&#8221;  available on my website, <a href="http://www.equidity.com/infographic" rel="nofollow">http://www.equidity.com/infographic</a></p>
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		<title>By: Ellie K</title>
		<link>http://gigaom.com/2013/03/02/our-innovation-economy-wont-grow-until-we-fix-the-broken-ipo-market/#comment-1317578</link>
		<dc:creator><![CDATA[Ellie K]]></dc:creator>
		<pubDate>Tue, 05 Mar 2013 01:23:25 +0000</pubDate>
		<guid isPermaLink="false">http://gigaom.com/?p=615959#comment-1317578</guid>
		<description><![CDATA[Structuring the financial markets in a way to reward long term success would likely include major change in trading practices, e.g. less high frequency trading, fractional share prices, backing away from dark pools.

Problem 1: Resistance because change like this appears to be fallback to older technology. Problem 2: Those who enjoy HFT profits will fight tooth-and-nail to keep it, unless they are convinced that rewarding long term success for innovative U.S. companies is in their own interests (which it is, but how to convince...?)]]></description>
		<content:encoded><![CDATA[<p>Structuring the financial markets in a way to reward long term success would likely include major change in trading practices, e.g. less high frequency trading, fractional share prices, backing away from dark pools.</p>
<p>Problem 1: Resistance because change like this appears to be fallback to older technology. Problem 2: Those who enjoy HFT profits will fight tooth-and-nail to keep it, unless they are convinced that rewarding long term success for innovative U.S. companies is in their own interests (which it is, but how to convince&#8230;?)</p>
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		<title>By: David Pat</title>
		<link>http://gigaom.com/2013/03/02/our-innovation-economy-wont-grow-until-we-fix-the-broken-ipo-market/#comment-1317544</link>
		<dc:creator><![CDATA[David Pat]]></dc:creator>
		<pubDate>Mon, 04 Mar 2013 23:05:44 +0000</pubDate>
		<guid isPermaLink="false">http://gigaom.com/?p=615959#comment-1317544</guid>
		<description><![CDATA[The key takeaway is that CEOs need to plan better for their IPOs by focusing on long term investors and that the financial markets need to be better structured in a way to reward long term success.]]></description>
		<content:encoded><![CDATA[<p>The key takeaway is that CEOs need to plan better for their IPOs by focusing on long term investors and that the financial markets need to be better structured in a way to reward long term success.</p>
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