undefined | Better HN

0 pointsjasmer3y ago0 comments

That's a bit '-ish'.

The bar is too high and there are huge numbers of really decent companies that need some kind of liquidity.

We're just not set up for it. Maybe it's a matter of just bringing more attention to small caps, I don't know.

Or another vehicle.

There are just too many truly great value creating business out there whereupon it's very difficult for founders to get their accumulated value out of it. People have devoted their lives to doing some good thing, but it's pointless if it's hard to market the company. This absolutely has effects on the industry because it's literally not worth the devotion required to do so many things if there can be no upuside even a good scenario of making a decent company.

It leaves way too much money in the hands of bankers and speculators and not those to took the biggest risks, made it work and likely created surpluses for everyone.

Definitely we need a new model.

0 comments

mchusma3y ago

The bar for direct listings is not because of the model its because of the costs to go public and be public. Small cap stocks are not what they used to be, and it seems like some process for reducing regulation on small cap stocks seems like it would benefit everyone.

jasmerOP3y ago

The very high bar for IPO (aka sarbanes-oxley, layers, bankers) is part of the 'model'.

Aside from expenses, there is a kind of 'stock populism' - big stocks get a lot of noise, which is a form of demand gen for the stock.

Companies with popular CEO's get a huge boost for example.

Both retail and bigger investors tend to prefer the bigger stocks.

This is part of the model which might possibly be improved.

We could adjust the taxation rules maybe, or, change listing rules, or literally just convince the banks that there is a huge opportunity in smallcap that's overlooked.

There are 100x mid-sized business opportunities for every big one - I see them literally every day.

I have told countless entrepreneurs that they have great businesses that are not suitable for VC because the growth and market is not there. And then what?

It's more economically efficient for them to nerd-out and compete for a 'Google Job' because they have all the power in the system.

Indirectly - there may be a bit opportunity with scale and regionality.

Large brands get a natural advantage in advertising as well, which doesn't work well for little regional shops.

I just bought a pair of winter boots on the high street out my door but totally by fluke - the are too small of an op to compete online.

There might be some taxation or international regs that we might want to put in place.

Perhaps I'm suggesting a bunch of adjustments that streamline financing for SMB and recognize the disproportionate power of conglomerates that it not always economically efficient. Often it is, but not always.

j / k navigate · click thread line to collapse