- You probably won't have a 10 year horizon if you are joining a company that is now a unicorn. You likely will if you found a company that later becomes one.
- Sarbanes-Oxley is a big villian here. It pushes the cost of legal compliance through the roof for public companies, forcing companies to delay IPOs until revenue is higher. In addition to delaying liquidity events, it prevents small traders from owning stock in companies that are ramping from ~100m valuation to ~1b, which is why there are so many unicorns now. This hurts normal investors big time, and helps people with access to private markets. (source: friendly neighborhood VC)
- the article doesn't go into AMT, where the IRS forces you to knowingly overpay tax when you exercise ISOs, then (slowly) pays it back over the years.
SOX exists because investors were tired of being defrauded by the people running the companies. While SOX might make it more onerous to go for an IPO, it's still a good thing for public markets.
I suspect the real reason companies stay private for so much longer is not because SOX-compliance is too expensive, but because companies can take advantage of private investors in ways that they cannot get away with in public markets.
> Sarbanes-Oxley is a big villian here. It pushes the cost of legal compliance through the roof for public companies, forcing companies to delay IPOs until revenue is higher.
SEC compliance costs are significantly higher than SOX for public companies, why not complain about that instead?
Neither the few hundred thousand dollars for SOX compliance or the million dollars for SEC compliance are significant pressures on the IPO scene right now. Wider availability of VC cash, better strategies for repeatedly going to that well, and big investment deals for private companies with large public companies (i.e. the Uber/Lyft model) have changed the market pressures so that IPOing isn't as valuable as it once was.
- You probably won't have a 10 year horizon if you are joining a company that is now a unicorn. You likely will if you found a company that later becomes one.
- Sarbanes-Oxley is a big villian here. It pushes the cost of legal compliance through the roof for public companies, forcing companies to delay IPOs until revenue is higher. In addition to delaying liquidity events, it prevents small traders from owning stock in companies that are ramping from ~100m valuation to ~1b, which is why there are so many unicorns now. This hurts normal investors big time, and helps people with access to private markets. (source: friendly neighborhood VC)
- the article doesn't go into AMT, where the IRS forces you to knowingly overpay tax when you exercise ISOs, then (slowly) pays it back over the years.