The Deregulation of the Private Equity Markets and the Decline in IPOs

Michael Ewens and Joan Farre-Mensa

No 67uzb, SocArXiv from Center for Open Science

Abstract: The deregulation of securities laws--in particular the National Securities Markets Improvement Act (NSMIA) of 1996--has increased the supply of private capital to late-stage private startups, which are now able to grow to a size that few private firms used to reach. NSMIA is one of a number of factors that have changed the going-public versus staying-private trade-off, helping bring about a new equilibrium where fewer startups go public, and those that do are older. This new equilibrium does not reflect an IPO market failure. Rather, founders are using their increased bargaining power vis-a-vis investors to stay private longer.

Date: 2019-12-25
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Citations: View citations in EconPapers (10)

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Related works:
Journal Article: The Deregulation of the Private Equity Markets and the Decline in IPOs (2020)
Working Paper: The Deregulation of the Private Equity Markets and the Decline in IPOs (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:67uzb

DOI: 10.31219/osf.io/67uzb

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