Running a public company – once the Holy Grail of entrepreneurial success and prestige – has become a fading star with the diminishing light especially apparent in markets such as the Valley region, where 60 percent of the names on the Business Journal’s Public Companies list are small to micro-cap.
According to the experts, two factors have motivated entrepreneurs to avoid going public: a growing private equity market, and the stringent regulations applied to public companies that require time and money for compliance. The number of public companies in the United States has been on the decline since the mid-1990s, and in 2016, the number of public companies listed on the U.S. stock market dropped to 46 percent of what it was two decades ago (see graph).
“In the last few years there has been a much more vibrant private market, with endless sources of institutional capital available for companies looking to grow,” said Lloyd Greif, chief executive of Greif & Co., an investment bank in downtown Los Angeles.
Read the full story in the July 24 issue of the San Fernando Valley Business Journal.