A
new company needs an idea to work on, people to do the work, stuff to work
with, and space to do it in. Considerable time usually passes before sales are
sufficient to pay the company’s costs. When the risks of new ventures are
highest, the money often comes from savings, family, friends, and perhaps a few
rich folks. But when a promising company needs substantial additional funds to
build the business, it could obtain money by selling its stock to public
investors.
Hold
it, said the SEC. You have to comply with this requirement and that requirement.
You have to incur heavy legal costs disclosing a preposterous amount of
information few people read. More and more companies skipped public markets and
obtained money from the wealthy through private funds not subject to
regulations. The number of companies owned by public investors and traded in stock
markets diminished significantly, widening the gap between rich and poor.
For
small companies, the Jobs Act of 2012 began the process of deregulation. But
with Congressional support, the Trump Administration greatly increased deregulation,
enabling numerous additional companies to go public. The stock of more
companies, including larger ones, can now be publicly owned. It’s been a win
for the nation.
