3 Steps to Make The Public Markets The Best Source of Growth Capital Again
Coulson suggests that one of the primary reasons high growth companies are not going public is because “practically all public companies that make annual, quarterly and periodic disclosures to the SEC still raise capital privately.” Coulson says, “If we want growing companies to go public, we need our public markets to be a competitive source of growth capital.“
One ‘easy’ solution, according to Coulson, is to let companies sell their shares through brokers directly into their established public markets. Coulson proposes three simple rule changes that would allow companies to sell their share directly into the public market and avoid the costs and inefficiency of taking private investment.
1. Streamline and broaden existing shelf registration rules that are currently only available to larger issuers.
2. Expand the safe harbor rule that allows a company to purchase shares in the public markets to include sales of legally authorized shares.
3. Allow brokers to sell shares without being subjected to underwriter obligations.
Coulson believes that, with these rule changes, “public markets can once again provide the best source of growth capital for companies seeking to expand their capacity to produce goods and services.“
Read the entire post on Bloomberg View HERE.