NASDAQ’s Bob Greifeld writes in the WSJ:
According to the Small Business Association, small businesses accounted for 64% of the 15 million net new jobs created from 1993 through 2008. In 2010, only 51% of jobs in the U.S. were created by small businesses. In the 1990s, initial public offerings by smaller companies (those raising $50 million or less) averaged more than 300 per year in the U.S. In 2010, there were only 30. Clearly, we need to do more to promote capital formation by these engines of job creation.
He has three ideas on how to do that:
- Revise SOX (“the most visible sign of overregulation in this country, and the primary excuse for foreign companies and smaller domestic companies to forgo a U.S. public listing”) to expand the exemption from the Section 404 audit to firms up to $700 million market cap, and make the audit biennial for companies with clean internal control audits.
- Join the U.K., Canada and Sweden in offering “incubator” markets for smaller companies.
- Increase H-1B visas and reform the employment-based green-card process: “Entrepreneurs are critical to this country, but under the current system we are educating highly skilled individuals and sending them elsewhere.”
Sounds like a plan.
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why not talk about the real impediments to small firms
1) changes in the bankruptcy laws that make it very difficult to discharge credit card debt (the major source of start up capital)
2) state non-competent laws—lots of literature that California’s growth has, historically, been due to weak non-existent enforcement of non-competes
3) really stupid laws on who can invest in start ups. State and federal laws permit anyone to gamble away their life savings (and just about every state not has casinos) but one can still only sell shares to accredited investors, etc.
4) limitation on number of sub-s members
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5) veil piercing by creditors who could have acted to protect themselves
6) disappearance of investment banking industry (Home Depot went public with 4 stores)
7) law professors who cannot teach students how to make deals happen
For example, how many of your students could help A & B form a sub-s, buy the assets of an existing bar or restaurant from a bank at a secured creditors auction, and be in business in 5 days?