Today, the IPO Task Force, a group of private sector professionals operating in the emerging growth company ecosystem, released formal recommendations to help re-energize the U.S. capital markets system. Spearheaded by former NVCA chairman, Kate Mitchell, the task force authored a detailed report entitled Rebuilding the IPO On-Ramp: Putting Emerging Growth Companies and the Job Market Back on the Road to Growth which outlines three major areas in which government can help smooth the path to IPO for these important companies. A summary presentation is also available.
Since the implementation of the 2002 Sarbanes Oxley Act, the 2003 Spitzer Global Settlement, and the subsequent decline in small company IPOs, a number of well respected groups have offered recommendations to address this growing challenge for U.S. economic growth. Unfortunately, without a bipartisan consensus on the depth and breadth of the problem, the political environment was not conducive to real action. This time is different. The data on the decline in the IPO market is incontrovertible. Similarly, the political leadership of both parties recognizes the link between the startup economy, the IPO market, and ultimately job creation. The recommendations put together by this task force are reasonable and actionable and will not compromise investor protection or investor participation. A key component to the proposal is a laser sharp focus on a specific type of company -- the emerging growth company -- which has been proven to be best poised to create jobs after an IPO. The On-Ramp report will be the first time this class of companies is defined and targeted for support.
In our initial briefings with members of Congress, regulators and the Administration, there is a great deal of interest in the On-Ramp recommendations. NVCA will work with the IPO Task Force to ensure the recommendations are part of the building dialogue around legislative and regulatory initiatives to address the capital markets. Of the myriad of policies being considered by Congress currently to jump start the economy, improving the U.S. capital markets system is one both political parties should embrace.
The NVCA encourages all interested parties to review the On-Ramp report. We thank the members of the IPO Task Force for the tremendous amount of time and effort they gave to this project on behalf of emerging growth companies.
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