The Modern IPO Is Useless. Let's Reinvent It
wsj.com
wsj.com
The entire saga:
https://www.bloomberg.com/view/articles/2017-08-24/unicorn-s...
https://www.bloomberg.com/view/articles/2017-09-15/icos-vcs-...
https://www.bloomberg.com/view/articles/2017-09-19/memory-mo...
edit: also, https://ftalphaville.ft.com/2017/09/19/2193913/the-public-ma...
I'll redeem my self with a non paywall explanation of Social Capital's S-1 filing: https://www.recode.net/2017/8/23/16194374/social-capital-inv...
Yes. One which addresses the unique aspects of the technology, adds consumer and investor protections, and acknowledges the liquidity benefits of an inevitable secondary market which no gatekeeper can prevent.
> One financial sandbox alternative is to enable capped ICOs to offer securities for real startups.
And not this.
Why not?
a totally roundabout way of using tokenized assets at all
So properly registered startup securities cannot be traded on properly registered securities exchanges.
If they are not properly registered and only sold to accredited investors, then they can only trade OTC to accredited investors.
The costs of registering to trade on properly registered securities exchanges are too high for startups.
The ongoing costs of transparency for publicly traded securities are too high for startups.
Registered broker-dealers that are able to trade properly registered tokenized assets do not currently exist, even if a tokenized offering were to properly register as a publicly tradable security.
Currently, people are avoiding all of this and get tradable assets with near-zero compliance costs. The rebuttal isn't "just register", it is "just register at a very high cost and lose all the benefits you already enjoyed at a lower cost and lose every possible service provider for the foreseeable future"
But even going that perspective is going to coincide with scalability and UI improvements which make decentralized exchanges better.
These structures will have no entity to register as a broker-dealer and are incapable of distinguishing between any smart-contract's legal status
The notion that most large companies are going to offer 'coins' that have no use or economic basis - or legal right to assets of the company - is in any way scalable for the economy is ... well ... unfeasible.
IPO's are not 'broken' - other than perhaps some extra layers of regulation, what is 'broken' is companies making money and having sustainable business models
There are a lot of private companies that could be publicly listed, much earlier than 'unicorn stage' - the problem is there isn't enough 'hype' because they're not huge, and there's not enough shares (and frothy banker's commissions) to go around.
The 'solution' to the difficulties of IPO have already arrive: massive, late stage funds. The D and E round deals, which are quite large, are now taking the place of IPO's at least for companies that wish to continue growing while not necessarily generating a huge amount of profits.
Surely some of the bureaucratic elements of being a publicly listed company could have a re-look - but there's no magic model, I think, at the end of the day.