JOBS Act changes could coax more ‘unicorns’ to IPO in 2018
January 15, 2018
Types : Bylined Articles
In just a one month span between December 2017 and January 2018, two late-stage unicorns (privately held companies that have a valuation of over $1 billion) have submitted confidential registration filings with the SEC: Spotify and Dropbox. Others are expected to follow soon. And it’s recent changes to the 2012 Jumpstart Our Business Startups Act (JOBS Act) that could be one reason for these moves.
The federal government enacted the JOBS Act to encourage small business and startup funding by easing regulations and allowing a larger base of individuals to become investors. The JOBS Act also made initial public offerings (IPOs) easier for smaller companies, in part by allowing early correspondence between companies and the SEC to be done in private, avoiding public scrutiny by the media and competitors. This past July, the SEC changed that rule to allow all companies, not just small businesses, to file early regulatory documents confidentially. The plan was to encourage later-stage companies to file for public offerings, and it may well be working.
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