Buzz Archive:
IPO Reform: The Long Runway Approach

by Joseph Bartlett, of VC Experts.com and Zachary J. Shulman, Cornell University The Johnson School, 2/24/2009

Only 31 companies went public on the major U. S. stock exchanges in 2008, an 85% decrease in the number of IPOs over 2007. According to Hoover's Inc., the 31 IPOs offered on the NYSE, NASDAQ and AMEX in 2008 raised $24.1 billion, compared to 209 IPOs in 2007 which raised $48.6 billion. Consulting firm Dealogic reports that the nearly 300 IPOs that were withdrawn worldwide in 2008 is almost double the number withdrawn in 2007.

While much of this recent decline in the number of companies going public is the result of the global financial crisis, there are some problems inherent in the current IPO system that should be addressed. This week VC Expert's founder, Joseph Bartlett, along with Zachary J. Shulman, visiting senior lecturer at the Johnson Graduate School of Management at Cornell University, introduce some very intriguing and revolutionary ideas that could revamp and improve the IPO process. As you read this week's fascinating article concerning IPO reform, remember the famous words of Albert Einstein: "We cannot solve our problems with the same thinking we used when we created them."