SlideShare a Scribd company logo
1 of 32
Download to read offline
Rebuilding the IPO On-Ramp
Putting Emerging Companies, Investors and the Job Market
Back on the Road to Growth



October 20, 2011




                                                           Confidential     1  
Agenda



                    IPO Task Force Members


                  IPOs In Decline Last 15 Years


             IPOs Support Innovation & Create Jobs


         Structural & Regulatory Elements Impacting IPOs


             Four Simple Steps to Tilt Balance Back




                                                           Confidential     2  
IPO Task Force Members

Venture Capitalists                         Securities Attorneys
   Kate Mitchell, Scale Venture Partners,      Joel Trotter, Latham & Watkins
   Task Force Chairman
                                               Steve Bochner, Wilson, Sonsini, Goodrich
   Mark Gorenberg, Hummer Winblad              & Rosati
   Partners
                                            Academicians/Accountants
   Tom Crotty, Battery Ventures
                                               Bill Sahlman, Harvard School of Business
Public Investors
                                               Carol Stacey, S.E.C. Institute
   Jeff Cardon & Karey Barker, Wasatch
                                               Chuck Robel, private investor & retired
   Advisors
                                               head of PWC Tech Practice
   Henry Ellenbogen, T. Rowe Price
                                            Investment Bankers
Entrepreneurs
                                               Paul Deninger, Evercore
   Magid Abraham Ph.D., CEO, Comscore
                                               Carter Mack, JMP Securities
   Josh James, former CEO, Omniture
                                               Brent Gledhill & Brett Paschke, William
   Desh Deshpande, former CEO and co-          Blair
   founder Cascade Communications &
                                            Additional Support From:
   Sycamore Networks and co-chair of
   NACIE                                       Investors, CEOs, NYSE, NASDAQ, NVCA


                                                                                  Confidential     3  
Emerging Company IPOs
Have Dropped Dramatically




                            Confidential     4  
Pre-1999 Avg                            Post-1999 Avg
                     900             547 IPOs / Year                          192 IPOs / Year
                     800
                                                                                 Deal size >= $50M
                     700
                                                                                 Deal size < $50M
                     600

     Number of       500
    Initial Public
      Offerings      400

                     300

                     200

                     100

                      0




          Pre-1999, Majority of IPOs Were Done for Emerging Growth Companies
          Sub $50M Deal-Sizes Were More Common than Larger Deals
          Shift to Larger Deals Impacts IPO Ecosystem: Issuers, Small IBs, Institutional Buyers


Source: JMP Securities, Dealogic, Capital Markets Advisory Partners, Grant Thornton                  Confidential     5  
Average Age Since Company Inception (in Years) at IPO


                                          4.8 Years
                             Early
                             1980s
    Median Age
      at IPO
                                          9.4 Years
                             Since
                             2007




Source: Thomson Reuters/National Venture Capital Association           Confidential     6  
Shift to M&A                        Resulting in Fewer U.S. Jobs


   100%

     90%

     80%

     70%

     60%

     50%                                                                                                                                           %  IPO

     40%                                                                                                                                           %  M&A

     30%

     20%

     10%

      0%




 Source: Thomson Reuters/National Venture Capital Association (Based on number of exits per year; M&A exits are for private company sales only.)

                                                                                                                                              Confidential     7  
Emerging Growth IPOs Are Critical to
        The U.S. Economy




                                       Confidential     8  
Innovative Startups Become Market Leaders

                           Web




          High Tech                  Retail / Services




         Life Science                   Cleantech




                                                         Confidential     9  
Innovative Companies Create Jobs and Grow Quickly

VC-Backed U.S. Revenues                                As a % of Total U.S. GDP     Outpaces 2008-2010
         ($T)                                               in 2008 - 2010         Total U.S. Sales Growth




                                                                         21%


 2000        2003        2006        2010                              VC-Backed   VC-Backed       Total
                                                                        Revenue     Growth        Growth


                  Former Startups Now Generate 21% of U.S. GDP &
                Were Able To Grow Even Through The Recent Recession

Source: Venture Impact 2007, 2008, 2009 & 2010 by IHS Global Insight

                                                                                                   Confidential     10  
IPOs Finance Significant Job Creation


        Post-IPO
        Employment
        Growth

        Pre-IPO
        Employment
        Growth




      92% of Job Growth in a Company Occurs Post-IPO
86% Post-IPO Job Growth Per August 2011 Survey of 2006+ IPOs
Source: Venture Impact 2007, 2008, 2009 & 2010 by IHS Global Insight; IPO Task Force August 2011 CEO Survey

                                                                                                              Confidential     11  
Elements of the IPO Problem




                              Confidential     12  
Challenges for Emerging Growth Company IPOs


                    Increased Regulation Makes IPO More Costly
  Supply Down



                    Regulations Favor High-Volume, Low-Cost Trades
Channel Evolution
                    Shift In Economics From Investing to Trading



  Weak Link To      IPO Shares Allocated to Traders vs. Investors
   Demand           Decrease in Information Available Pre- & Post-IPO




                                                               Confidential     13  
Supply: Post-IPO CEO Survey
     Costs of Going and Staying Public Are High


          Average Cost $2.5M to Go Public                                        Annual Cost $1.5M to Stay Public




                                        Costs Including SOX, Legal, Accounting

Source: IPO Task Force August 2011 CEO survey of incremental IPO costs from 35 CEOs of companies that went public since 2006;


                                                                                                                                Confidential     14  
Channel Focus:
Trading Drives Revenue For Largest Investment Banks

                   Typical Large Bank           Typical Boutique Bank




      Large Bank Client Base Dominated by Traders vs. Investors
      High Frequency Trading Up From <25% to 75% of Volume Over Last 5 Years
      Research Focused on Large-Cap Stocks That Drive Revenue
Source: JMP Securities

                                                                        Confidential     15  
Demand Exists:
    Emerging Company IPOs Deliver Returns To Investors

                  Myth: Small-Cap IPOs Lag in Performance
                  Truth: Small-Cap Performance Equal or Exceed Large-Cap IPOs


                   Post-­IPO Market Cap             1 Day   1 Month   3 Months   6 Months   1 Year

                $200-­$500          Average         27.5%     34.8%    45.1%      43.9%      33.5%


              $1B or more           Average         35.9%     39.7%    37.7%      32.8%      28.5%




                  Investor Interviews Showed:
                     Strong Performance & Demand for IPOs
                     Challenge to Get Allocation of Shares
                     Decline in Availability of Research for IPO Companies
Source: JMP Securities, Dealogic
Note: Includes all IPOs from 1/1/2001   9/30/2011
                                                                                                     Confidential     16  
IPO Task Force Draft Recommendations




                                       Confidential     17  
Four Draft Recommendations to Stimulate IPOs



Increase Supply
                   Companies



                   Improve Availability of Information for Investors
Improve Channel
                   Educate Issuers on How to Work With Banks Effectively




 Incent Demand    One-Time IPO Tax Incentive to Buy & Hold IPO Shares




                                                               Confidential     18  
Create a New Category of Issuer: Emerging Growth
                  Company
Increase Supply      Measurement begins at IPO
                     Ends with 10-K for the earliest year in which:
                          Annual Gross Revenue Exceeds $1 Billion
                          Company Becomes Well-Known Seasoned Issuer
Improve Channel           Fifth Anniversary of IPO Effective Date

                     that provides scaled regulation (details next slide)
                          Builds on Existing Scaled Disclosure Rules for
                          Smaller Reporting Companies
Incent Demand
                     Status is Temporary & Transitional
                          Impacts 14% of Companies & 3% of Total Market
                          Capitalization Today
                     Goal: Reduced Costs For IPO Candidates While
                     Maintaining Investor Protection

                                                                      Confidential     19  
The Solution:



                      Two years of audited financial statements at IPO instead of
                      three
Increase Supply
                           Financial statements & selected financial data
                           accumulate until full presentation at Year 3
                      Scaled MD&A and executive comp disclosure
                      Exemption from:
Improve Channel            Auditor attestation of ICFR   SOX 404(b)
                           Say-on-pay, say-on-frequency and say-on-parachute
                           votes
                           Conflict minerals disclosure requirements
                           Pay-for-performance disclosure requirements
 Incent Demand
                           CEO pay ratio requirements
                      Modifications and Extended Adoption of New FASB
                      Standards & PCAOB Rules


                  Transition

                                                                       Confidential     20  
The Solution: Improve Investor Communications


                    Improve Availability and Flow of Information to
Increase Supply
                    Investors for IPO
                       Modernize Securities Act Framework
                       Many restrictions are vestiges of a paper-based
                       world
Improve Channel
                       Release No. 33-

                       Opportune time to build on new approaches
                       introduced in 2005
 Incent Demand

                       Goal: permit IPO candidates to communicate with
                       investors while maintaining investor protection



                                                                Confidential     21  
The Solution: Improved Investor Communications

                    Improve Availability and Flow of Information to Investors
                       Greater Role for Research During Capital Formation Process
Increase Supply             Maintain principles & codes of conduct including separation of
                            banking and research
                            Prominent disclosure regarding underwriter relationship
                       Modifications to Banking Research
                            Expand existing research safe harbors
Improve Channel             Permit broker-dealers to initiate coverage without being

                            Eliminate unnecessary quiet periods
                            Eliminate unnecessary restrictions on analyst communication
                       Modifications to Company Disclosures
 Incent Demand
                            Permit confidential initial filings & review for U.S. issuers
                            Expand permissible pre-filing communications


                                  Permit broader pre-filing investor communications



                                                                               Confidential     22  
The Solution: Educate Issuers On Effective Use of
Banking Channel to Build New Investor Base

                     Educate Issuers About the New Capital Markets
Increase Supply      Environment
                        Industry Participants, Not Policy Makers, Are
                        Responsible For Education
                        Help Emerging Growth Companies Become Better
                        Consumers of Investment Banking Services
Improve Channel         Improved Education and Increased Involvement for
                        Management and Board
                             Choice of Balanced Investment Banking
                             Syndicate

 Incent Demand
                             Improve Practice of Investor Communications


                        Goal: To Reconnect Buyers and Sellers of Small Cap
                        Stocks More Efficiently


                                                                        Confidential     23  
The Solution: Demand Side Incentives



Increase Supply



                     Incent Buyers To Participate In IPOs
Improve Channel
                        Lower the Capital Gains Rate for Buyers of Newly
                        Issued Stock if They Hold It for Two Years

                        Goal: To Incentivize Investors to Participate in
 Incent Demand          Emerging Growth IPOs




                                                                           Confidential     24  
Appendix




           Confidential     25  
3% of Total Market Capitalization




Sources: Dealogic, Capital IQ, World Federation of Exchanges
                                                                           Confidential     26  
The Regulatory Cascade
               Accounting & Compliance From Policy Makers &
1996 - Today
               Industry
1996           Advent of Electronic Trading


1999           Gramm-Leach-Bliley Overturns Separation Of Commercial &
               Investment Banking
2001           Decimalization Introduced For all Exchange Traded Shares

2002           Sarbanes-Oxley Act

2002   Today   Additional Accounting & Compliance from Policy Makers & Industry


2003           Global Analyst Settlement Separates Research & Banking


2009 - Today   Dodd-Frank Act


                                                                        Confidential     27  
CEO Survey: IPOs Fuel Growth
 But Are Increasingly Difficult




                                  Confidential     28  
Pre-IPO CEOs Target IPO To Finance Growth


                                   Motivation for Pre-IPO Companies




Source: IPO Task Force August 2011 CEO Survey
                                                                      Confidential     29  
Managing IPO Costs and Compliance Was Challenging

Source: IPO Task Force August 2011 CEO Survey
                                                                    Confidential     30  
Public Company CEOs:
IPOs Are Important But Increasingly Difficult


                                                  Agree   Neutral   Disagree

 Strong & Accessible IPO Market Is Important
                                                  100%      0%        0%
 to U.S. Economy & Global Competitiveness

 U.S. IPO Market Is Accessible for Small
                                                  23%      11%        66%
 Companies

 It Is Not as Attractive an Option to Go Public
                                                  86%       3%        12%
 Today as It Was in 1995

 Going Public Was a Relatively Painless
                                                  17%      14%        69%
 Experience

 Going Public Has Been a Positive Event in My
                                                  83%      14%        3%
 Company's History




                     Value of IPO: 86% Growth In Employees

Source: IPO Task Force August 2011 CEO Survey
                                                                      Confidential     31  
Rebuilding the IPO On-Ramp
Putting Emerging Companies, Investor and the Job Market
Back on the Road to Growth



October 20, 2011




                                                          Confidential     32  

More Related Content

What's hot

Everything about Performance Equity Compensation (or as much as fits into an ...
Everything about Performance Equity Compensation (or as much as fits into an ...Everything about Performance Equity Compensation (or as much as fits into an ...
Everything about Performance Equity Compensation (or as much as fits into an ...PERFORMENSATION
 
2011 Endeavor Summit Hot Topic workshop: Term Sheet Negotiations, the devil i...
2011 Endeavor Summit Hot Topic workshop: Term Sheet Negotiations, the devil i...2011 Endeavor Summit Hot Topic workshop: Term Sheet Negotiations, the devil i...
2011 Endeavor Summit Hot Topic workshop: Term Sheet Negotiations, the devil i...Ariel Muslera
 
Mercer Capital's An Introduction to Dividends and Dividend Policy for Private...
Mercer Capital's An Introduction to Dividends and Dividend Policy for Private...Mercer Capital's An Introduction to Dividends and Dividend Policy for Private...
Mercer Capital's An Introduction to Dividends and Dividend Policy for Private...Mercer Capital
 
Considerations for a sustainable corporate venture program by Robert Ackerma...
Considerations for a sustainable corporate venture program  by Robert Ackerma...Considerations for a sustainable corporate venture program  by Robert Ackerma...
Considerations for a sustainable corporate venture program by Robert Ackerma...the Hartsook Letter
 
Board of directors
Board of directorsBoard of directors
Board of directorsAwaisQarnii
 
Due diligence slides
Due diligence slidesDue diligence slides
Due diligence slidesLe Tat Thanh
 
Finding Value in Corporate Turnarounds
Finding Value in Corporate TurnaroundsFinding Value in Corporate Turnarounds
Finding Value in Corporate Turnaroundsasianextractor
 
nygard JCB JanFeb16-3
nygard JCB JanFeb16-3nygard JCB JanFeb16-3
nygard JCB JanFeb16-3dmnygard
 
Casedy Consulting LLC Brochure
Casedy Consulting LLC BrochureCasedy Consulting LLC Brochure
Casedy Consulting LLC Brochureguest0c7a1f
 
Kennet - Growth Strategies For Bootstrapped Companies
Kennet - Growth Strategies For Bootstrapped CompaniesKennet - Growth Strategies For Bootstrapped Companies
Kennet - Growth Strategies For Bootstrapped CompaniesKennet Partners
 
Wcm remedies concl
Wcm remedies conclWcm remedies concl
Wcm remedies conclpjain30688
 
Role of due diligence in mergers and acquisition
Role of due diligence in mergers and acquisitionRole of due diligence in mergers and acquisition
Role of due diligence in mergers and acquisitionChenoy Ceil
 
How to Set Up & Run a Business in the USA
How to Set Up & Run a Business in the USAHow to Set Up & Run a Business in the USA
How to Set Up & Run a Business in the USARavixGroup
 
Executing an MBO
Executing an MBOExecuting an MBO
Executing an MBObemmins
 
Nordic IR conference Stockholm Strengthening the role of Investor Relations
Nordic IR conference Stockholm Strengthening the role of Investor RelationsNordic IR conference Stockholm Strengthening the role of Investor Relations
Nordic IR conference Stockholm Strengthening the role of Investor Relationsnordicirconference
 
Armanino CFO Evolution White Paper 2013
Armanino CFO Evolution White Paper 2013Armanino CFO Evolution White Paper 2013
Armanino CFO Evolution White Paper 2013THourigan
 
Accuserv Corprate Presentation
Accuserv Corprate PresentationAccuserv Corprate Presentation
Accuserv Corprate PresentationPankaj Agarwal
 

What's hot (20)

Everything about Performance Equity Compensation (or as much as fits into an ...
Everything about Performance Equity Compensation (or as much as fits into an ...Everything about Performance Equity Compensation (or as much as fits into an ...
Everything about Performance Equity Compensation (or as much as fits into an ...
 
2011 Endeavor Summit Hot Topic workshop: Term Sheet Negotiations, the devil i...
2011 Endeavor Summit Hot Topic workshop: Term Sheet Negotiations, the devil i...2011 Endeavor Summit Hot Topic workshop: Term Sheet Negotiations, the devil i...
2011 Endeavor Summit Hot Topic workshop: Term Sheet Negotiations, the devil i...
 
M&A Conference 130416
M&A Conference 130416M&A Conference 130416
M&A Conference 130416
 
Mercer Capital's An Introduction to Dividends and Dividend Policy for Private...
Mercer Capital's An Introduction to Dividends and Dividend Policy for Private...Mercer Capital's An Introduction to Dividends and Dividend Policy for Private...
Mercer Capital's An Introduction to Dividends and Dividend Policy for Private...
 
eXp eXplained
eXp eXplainedeXp eXplained
eXp eXplained
 
Considerations for a sustainable corporate venture program by Robert Ackerma...
Considerations for a sustainable corporate venture program  by Robert Ackerma...Considerations for a sustainable corporate venture program  by Robert Ackerma...
Considerations for a sustainable corporate venture program by Robert Ackerma...
 
Board of directors
Board of directorsBoard of directors
Board of directors
 
Due diligence slides
Due diligence slidesDue diligence slides
Due diligence slides
 
Finding Value in Corporate Turnarounds
Finding Value in Corporate TurnaroundsFinding Value in Corporate Turnarounds
Finding Value in Corporate Turnarounds
 
nygard JCB JanFeb16-3
nygard JCB JanFeb16-3nygard JCB JanFeb16-3
nygard JCB JanFeb16-3
 
Casedy Consulting LLC Brochure
Casedy Consulting LLC BrochureCasedy Consulting LLC Brochure
Casedy Consulting LLC Brochure
 
Kennet - Growth Strategies For Bootstrapped Companies
Kennet - Growth Strategies For Bootstrapped CompaniesKennet - Growth Strategies For Bootstrapped Companies
Kennet - Growth Strategies For Bootstrapped Companies
 
Wcm remedies concl
Wcm remedies conclWcm remedies concl
Wcm remedies concl
 
Role of due diligence in mergers and acquisition
Role of due diligence in mergers and acquisitionRole of due diligence in mergers and acquisition
Role of due diligence in mergers and acquisition
 
How to Set Up & Run a Business in the USA
How to Set Up & Run a Business in the USAHow to Set Up & Run a Business in the USA
How to Set Up & Run a Business in the USA
 
Executing an MBO
Executing an MBOExecuting an MBO
Executing an MBO
 
Nordic IR conference Stockholm Strengthening the role of Investor Relations
Nordic IR conference Stockholm Strengthening the role of Investor RelationsNordic IR conference Stockholm Strengthening the role of Investor Relations
Nordic IR conference Stockholm Strengthening the role of Investor Relations
 
Become A CPA
Become A CPABecome A CPA
Become A CPA
 
Armanino CFO Evolution White Paper 2013
Armanino CFO Evolution White Paper 2013Armanino CFO Evolution White Paper 2013
Armanino CFO Evolution White Paper 2013
 
Accuserv Corprate Presentation
Accuserv Corprate PresentationAccuserv Corprate Presentation
Accuserv Corprate Presentation
 

Viewers also liked

Charltons IPO pitchbook
Charltons  IPO pitchbookCharltons  IPO pitchbook
Charltons IPO pitchbookkaren_to
 
Ciszewski Financial Communications - presentation of the agency
Ciszewski Financial Communications - presentation of the agencyCiszewski Financial Communications - presentation of the agency
Ciszewski Financial Communications - presentation of the agencyPaweł Tomczuk
 
Metro Manila Office Briefing Q2 2015
Metro Manila Office Briefing Q2 2015Metro Manila Office Briefing Q2 2015
Metro Manila Office Briefing Q2 2015KMC Savills, Inc.
 
Презентация о безопасности
Презентация о безопасностиПрезентация о безопасности
Презентация о безопасностиschool31-kirov
 
An Investor's Guide to Metro Manila Real Estate
An Investor's Guide to Metro Manila Real EstateAn Investor's Guide to Metro Manila Real Estate
An Investor's Guide to Metro Manila Real EstateKMC Savills, Inc.
 
Metro Manila Property Outlook 2015
Metro Manila Property Outlook 2015Metro Manila Property Outlook 2015
Metro Manila Property Outlook 2015KMC Savills, Inc.
 
2014 Real Estate Market Update and 2015 Forecast Philippines
2014 Real Estate Market Update and 2015 Forecast Philippines2014 Real Estate Market Update and 2015 Forecast Philippines
2014 Real Estate Market Update and 2015 Forecast PhilippinesKMC Savills, Inc.
 
ArthaLand Tower Building Presentation
ArthaLand Tower Building PresentationArthaLand Tower Building Presentation
ArthaLand Tower Building PresentationKMC Savills, Inc.
 
Edc presentation db_ceemea_1-1_conf_london_jan-13
Edc presentation db_ceemea_1-1_conf_london_jan-13Edc presentation db_ceemea_1-1_conf_london_jan-13
Edc presentation db_ceemea_1-1_conf_london_jan-13Company Spotlight
 
Practical Guidance on Securities Offerings (including High Yield and Initial ...
Practical Guidance on Securities Offerings (including High Yield and Initial ...Practical Guidance on Securities Offerings (including High Yield and Initial ...
Practical Guidance on Securities Offerings (including High Yield and Initial ...Winston & Strawn LLP
 
Candle IPO Roadmap
Candle IPO RoadmapCandle IPO Roadmap
Candle IPO RoadmapRaymond Ng
 
Edc presentation dr_ultimate_oil_services_and_e&p_conf
Edc presentation dr_ultimate_oil_services_and_e&p_confEdc presentation dr_ultimate_oil_services_and_e&p_conf
Edc presentation dr_ultimate_oil_services_and_e&p_confCompany Spotlight
 
2016 Occupational Fraud - Trends and Developments_Henne
2016 Occupational Fraud - Trends and Developments_Henne2016 Occupational Fraud - Trends and Developments_Henne
2016 Occupational Fraud - Trends and Developments_HenneJohn Michael Henne, CPA
 

Viewers also liked (20)

Charltons IPO pitchbook
Charltons  IPO pitchbookCharltons  IPO pitchbook
Charltons IPO pitchbook
 
IPO Readiness
IPO ReadinessIPO Readiness
IPO Readiness
 
Pr-Service
Pr-ServicePr-Service
Pr-Service
 
Ipo
IpoIpo
Ipo
 
Ciszewski Financial Communications - presentation of the agency
Ciszewski Financial Communications - presentation of the agencyCiszewski Financial Communications - presentation of the agency
Ciszewski Financial Communications - presentation of the agency
 
Avida Nuvali 2014
Avida Nuvali 2014Avida Nuvali 2014
Avida Nuvali 2014
 
Metro Manila Office Briefing Q2 2015
Metro Manila Office Briefing Q2 2015Metro Manila Office Briefing Q2 2015
Metro Manila Office Briefing Q2 2015
 
Презентация о безопасности
Презентация о безопасностиПрезентация о безопасности
Презентация о безопасности
 
An Investor's Guide to Metro Manila Real Estate
An Investor's Guide to Metro Manila Real EstateAn Investor's Guide to Metro Manila Real Estate
An Investor's Guide to Metro Manila Real Estate
 
Metro Manila Property Outlook 2015
Metro Manila Property Outlook 2015Metro Manila Property Outlook 2015
Metro Manila Property Outlook 2015
 
2014 Real Estate Market Update and 2015 Forecast Philippines
2014 Real Estate Market Update and 2015 Forecast Philippines2014 Real Estate Market Update and 2015 Forecast Philippines
2014 Real Estate Market Update and 2015 Forecast Philippines
 
ArthaLand Tower Building Presentation
ArthaLand Tower Building PresentationArthaLand Tower Building Presentation
ArthaLand Tower Building Presentation
 
NUVALI PRESENTATION
NUVALI PRESENTATIONNUVALI PRESENTATION
NUVALI PRESENTATION
 
Edc presentation db_ceemea_1-1_conf_london_jan-13
Edc presentation db_ceemea_1-1_conf_london_jan-13Edc presentation db_ceemea_1-1_conf_london_jan-13
Edc presentation db_ceemea_1-1_conf_london_jan-13
 
Practical Guidance on Securities Offerings (including High Yield and Initial ...
Practical Guidance on Securities Offerings (including High Yield and Initial ...Practical Guidance on Securities Offerings (including High Yield and Initial ...
Practical Guidance on Securities Offerings (including High Yield and Initial ...
 
Candle IPO Roadmap
Candle IPO RoadmapCandle IPO Roadmap
Candle IPO Roadmap
 
Edc presentation dr_ultimate_oil_services_and_e&p_conf
Edc presentation dr_ultimate_oil_services_and_e&p_confEdc presentation dr_ultimate_oil_services_and_e&p_conf
Edc presentation dr_ultimate_oil_services_and_e&p_conf
 
Middle Market M&A
Middle Market M&AMiddle Market M&A
Middle Market M&A
 
2016 Occupational Fraud - Trends and Developments_Henne
2016 Occupational Fraud - Trends and Developments_Henne2016 Occupational Fraud - Trends and Developments_Henne
2016 Occupational Fraud - Trends and Developments_Henne
 
The IPO & Stock Compensation
The IPO & Stock CompensationThe IPO & Stock Compensation
The IPO & Stock Compensation
 

Similar to IPO Task Force

NVCA 4-Pillar Plan
NVCA 4-Pillar PlanNVCA 4-Pillar Plan
NVCA 4-Pillar Planwtmyers
 
1001 J V C A N V C A Liquidity Efforts
1001  J V C A    N V C A  Liquidity  Efforts1001  J V C A    N V C A  Liquidity  Efforts
1001 J V C A N V C A Liquidity EffortsAllen Miner
 
NVCA: Restoring Liquidity to US Venture Capital - Apr09
NVCA: Restoring Liquidity to US Venture Capital - Apr09NVCA: Restoring Liquidity to US Venture Capital - Apr09
NVCA: Restoring Liquidity to US Venture Capital - Apr09kellywalters
 
Nvca 4 Pillar Plan To Restore Vc Liquidity
Nvca 4 Pillar Plan To Restore Vc LiquidityNvca 4 Pillar Plan To Restore Vc Liquidity
Nvca 4 Pillar Plan To Restore Vc Liquiditydinonap
 
Growing Your Business In The Modern Economy: 6 VCs Weigh In
Growing Your Business In The Modern Economy: 6 VCs Weigh InGrowing Your Business In The Modern Economy: 6 VCs Weigh In
Growing Your Business In The Modern Economy: 6 VCs Weigh InEric Dahl
 
Vcr 2012 final
Vcr 2012 finalVcr 2012 final
Vcr 2012 finalMila Rocha
 
Alternative Sources Of Funding For Creative Technology Business
Alternative Sources Of Funding For Creative Technology BusinessAlternative Sources Of Funding For Creative Technology Business
Alternative Sources Of Funding For Creative Technology Businessgcecs2009
 
Right Sizing The US VC Environ061009202
Right Sizing The US VC Environ061009202Right Sizing The US VC Environ061009202
Right Sizing The US VC Environ061009202Kristin DePlatchett
 
US Venture Capital
US Venture CapitalUS Venture Capital
US Venture CapitalColumbia
 
Private company secondary markets january 2012 - markum breakfast
Private company secondary markets   january 2012 - markum breakfastPrivate company secondary markets   january 2012 - markum breakfast
Private company secondary markets january 2012 - markum breakfastJason Jones
 
GLOBAL M&A IN CHANGING TIMES
GLOBAL M&A IN CHANGING TIMESGLOBAL M&A IN CHANGING TIMES
GLOBAL M&A IN CHANGING TIMESAranca
 
Private company secondary markets - November 2011
Private company secondary markets - November 2011Private company secondary markets - November 2011
Private company secondary markets - November 2011Jason Jones
 
090420 a new financial order - 114 page abridged version for financial markets
090420   a new financial order - 114 page abridged version for financial markets090420   a new financial order - 114 page abridged version for financial markets
090420 a new financial order - 114 page abridged version for financial marketsSuzanne Duncan
 
Investor Day 2011
Investor Day 2011Investor Day 2011
Investor Day 2011gaviv
 
Mutual Fund Stars 08
Mutual Fund Stars 08Mutual Fund Stars 08
Mutual Fund Stars 08Erik Kolb
 
Insiders Guide On How To Raise Venture Capital
Insiders Guide On How To Raise Venture CapitalInsiders Guide On How To Raise Venture Capital
Insiders Guide On How To Raise Venture CapitalBob Dahlberg
 
Avnet Analyst Day 2010 Presentation 1 Opening Remarks
Avnet Analyst Day 2010 Presentation 1 Opening RemarksAvnet Analyst Day 2010 Presentation 1 Opening Remarks
Avnet Analyst Day 2010 Presentation 1 Opening RemarksAvnet Electronics Marketing
 
2016 IVCA Viewpoint - The Art+Science of Investing in Private Companies
2016 IVCA Viewpoint - The Art+Science of Investing in Private Companies2016 IVCA Viewpoint - The Art+Science of Investing in Private Companies
2016 IVCA Viewpoint - The Art+Science of Investing in Private Companiesillinoisvc
 

Similar to IPO Task Force (20)

NVCA 4-Pillar Plan
NVCA 4-Pillar PlanNVCA 4-Pillar Plan
NVCA 4-Pillar Plan
 
1001 J V C A N V C A Liquidity Efforts
1001  J V C A    N V C A  Liquidity  Efforts1001  J V C A    N V C A  Liquidity  Efforts
1001 J V C A N V C A Liquidity Efforts
 
NVCA: Restoring Liquidity to US Venture Capital - Apr09
NVCA: Restoring Liquidity to US Venture Capital - Apr09NVCA: Restoring Liquidity to US Venture Capital - Apr09
NVCA: Restoring Liquidity to US Venture Capital - Apr09
 
The JOBS Act
The JOBS ActThe JOBS Act
The JOBS Act
 
Nvca 4 Pillar Plan To Restore Vc Liquidity
Nvca 4 Pillar Plan To Restore Vc LiquidityNvca 4 Pillar Plan To Restore Vc Liquidity
Nvca 4 Pillar Plan To Restore Vc Liquidity
 
Growing Your Business In The Modern Economy: 6 VCs Weigh In
Growing Your Business In The Modern Economy: 6 VCs Weigh InGrowing Your Business In The Modern Economy: 6 VCs Weigh In
Growing Your Business In The Modern Economy: 6 VCs Weigh In
 
Vcr 2012 final
Vcr 2012 finalVcr 2012 final
Vcr 2012 final
 
Alternative Sources Of Funding For Creative Technology Business
Alternative Sources Of Funding For Creative Technology BusinessAlternative Sources Of Funding For Creative Technology Business
Alternative Sources Of Funding For Creative Technology Business
 
Right Sizing The US VC Environ061009202
Right Sizing The US VC Environ061009202Right Sizing The US VC Environ061009202
Right Sizing The US VC Environ061009202
 
US Venture Capital
US Venture CapitalUS Venture Capital
US Venture Capital
 
Private company secondary markets january 2012 - markum breakfast
Private company secondary markets   january 2012 - markum breakfastPrivate company secondary markets   january 2012 - markum breakfast
Private company secondary markets january 2012 - markum breakfast
 
GLOBAL M&A IN CHANGING TIMES
GLOBAL M&A IN CHANGING TIMESGLOBAL M&A IN CHANGING TIMES
GLOBAL M&A IN CHANGING TIMES
 
Private company secondary markets - November 2011
Private company secondary markets - November 2011Private company secondary markets - November 2011
Private company secondary markets - November 2011
 
090420 a new financial order - 114 page abridged version for financial markets
090420   a new financial order - 114 page abridged version for financial markets090420   a new financial order - 114 page abridged version for financial markets
090420 a new financial order - 114 page abridged version for financial markets
 
Investor Day 2011
Investor Day 2011Investor Day 2011
Investor Day 2011
 
The Value of Human Capital
The Value of Human CapitalThe Value of Human Capital
The Value of Human Capital
 
Mutual Fund Stars 08
Mutual Fund Stars 08Mutual Fund Stars 08
Mutual Fund Stars 08
 
Insiders Guide On How To Raise Venture Capital
Insiders Guide On How To Raise Venture CapitalInsiders Guide On How To Raise Venture Capital
Insiders Guide On How To Raise Venture Capital
 
Avnet Analyst Day 2010 Presentation 1 Opening Remarks
Avnet Analyst Day 2010 Presentation 1 Opening RemarksAvnet Analyst Day 2010 Presentation 1 Opening Remarks
Avnet Analyst Day 2010 Presentation 1 Opening Remarks
 
2016 IVCA Viewpoint - The Art+Science of Investing in Private Companies
2016 IVCA Viewpoint - The Art+Science of Investing in Private Companies2016 IVCA Viewpoint - The Art+Science of Investing in Private Companies
2016 IVCA Viewpoint - The Art+Science of Investing in Private Companies
 

Recently uploaded

OAT_RI_Ep18 WeighingTheRisks_Mar24_GlobalCredit.pptx
OAT_RI_Ep18 WeighingTheRisks_Mar24_GlobalCredit.pptxOAT_RI_Ep18 WeighingTheRisks_Mar24_GlobalCredit.pptx
OAT_RI_Ep18 WeighingTheRisks_Mar24_GlobalCredit.pptxhiddenlevers
 
2024-04-09 - Pension Playpen roundtable - slides.pptx
2024-04-09 - Pension Playpen roundtable - slides.pptx2024-04-09 - Pension Playpen roundtable - slides.pptx
2024-04-09 - Pension Playpen roundtable - slides.pptxHenry Tapper
 
Banking: Commercial and Central Banking.pptx
Banking: Commercial and Central Banking.pptxBanking: Commercial and Central Banking.pptx
Banking: Commercial and Central Banking.pptxANTHONYAKINYOSOYE1
 
Building pressure? Rising rents, and what to expect in the future
Building pressure? Rising rents, and what to expect in the futureBuilding pressure? Rising rents, and what to expect in the future
Building pressure? Rising rents, and what to expect in the futureResolutionFoundation
 
AnyConv.com__FSS Advance Retail & Distribution - 15.06.17.ppt
AnyConv.com__FSS Advance Retail & Distribution - 15.06.17.pptAnyConv.com__FSS Advance Retail & Distribution - 15.06.17.ppt
AnyConv.com__FSS Advance Retail & Distribution - 15.06.17.pptPriyankaSharma89719
 
Uk-NO1 Amil baba in pakistan Amil Baba in Karachi Black Magic Islamabad Kala ...
Uk-NO1 Amil baba in pakistan Amil Baba in Karachi Black Magic Islamabad Kala ...Uk-NO1 Amil baba in pakistan Amil Baba in Karachi Black Magic Islamabad Kala ...
Uk-NO1 Amil baba in pakistan Amil Baba in Karachi Black Magic Islamabad Kala ...Amil baba
 
Financial Preparation for Millennia.pptx
Financial Preparation for Millennia.pptxFinancial Preparation for Millennia.pptx
Financial Preparation for Millennia.pptxsimon978302
 
Financial analysis on Risk and Return.ppt
Financial analysis on Risk and Return.pptFinancial analysis on Risk and Return.ppt
Financial analysis on Risk and Return.ppttadegebreyesus
 
ekthesi-trapeza-tis-ellados-gia-2023.pdf
ekthesi-trapeza-tis-ellados-gia-2023.pdfekthesi-trapeza-tis-ellados-gia-2023.pdf
ekthesi-trapeza-tis-ellados-gia-2023.pdfSteliosTheodorou4
 
ΤτΕ: Ανάπτυξη 2,3% και πληθωρισμός 2,8% φέτος
ΤτΕ: Ανάπτυξη 2,3% και πληθωρισμός 2,8% φέτοςΤτΕ: Ανάπτυξη 2,3% και πληθωρισμός 2,8% φέτος
ΤτΕ: Ανάπτυξη 2,3% και πληθωρισμός 2,8% φέτοςNewsroom8
 
Hello this ppt is about seminar final project
Hello this ppt is about seminar final projectHello this ppt is about seminar final project
Hello this ppt is about seminar final projectninnasirsi
 
What is sip and What are its Benefits in 2024
What is sip and What are its Benefits in 2024What is sip and What are its Benefits in 2024
What is sip and What are its Benefits in 2024prajwalgopocket
 
NO1 Certified Black Magic Specialist Expert In Bahawalpur, Sargodha, Sialkot,...
NO1 Certified Black Magic Specialist Expert In Bahawalpur, Sargodha, Sialkot,...NO1 Certified Black Magic Specialist Expert In Bahawalpur, Sargodha, Sialkot,...
NO1 Certified Black Magic Specialist Expert In Bahawalpur, Sargodha, Sialkot,...Amil baba
 
Global Economic Outlook, 2024 - Scholaride Consulting
Global Economic Outlook, 2024 - Scholaride ConsultingGlobal Economic Outlook, 2024 - Scholaride Consulting
Global Economic Outlook, 2024 - Scholaride Consultingswastiknandyofficial
 
Introduction to Health Economics Dr. R. Kurinji Malar.pptx
Introduction to Health Economics Dr. R. Kurinji Malar.pptxIntroduction to Health Economics Dr. R. Kurinji Malar.pptx
Introduction to Health Economics Dr. R. Kurinji Malar.pptxDrRkurinjiMalarkurin
 
The Inspirational Story of Julio Herrera Velutini - Global Finance Leader
The Inspirational Story of Julio Herrera Velutini - Global Finance LeaderThe Inspirational Story of Julio Herrera Velutini - Global Finance Leader
The Inspirational Story of Julio Herrera Velutini - Global Finance LeaderArianna Varetto
 
Money Forward Integrated Report “Forward Map” 2024
Money Forward Integrated Report “Forward Map” 2024Money Forward Integrated Report “Forward Map” 2024
Money Forward Integrated Report “Forward Map” 2024Money Forward
 
Crypto Confidence Unlocked: AnyKYCaccount's Shortcut to Binance Verification
Crypto Confidence Unlocked: AnyKYCaccount's Shortcut to Binance VerificationCrypto Confidence Unlocked: AnyKYCaccount's Shortcut to Binance Verification
Crypto Confidence Unlocked: AnyKYCaccount's Shortcut to Binance VerificationAny kyc Account
 
10 QuickBooks Tips 2024 - Globus Finanza.pdf
10 QuickBooks Tips 2024 - Globus Finanza.pdf10 QuickBooks Tips 2024 - Globus Finanza.pdf
10 QuickBooks Tips 2024 - Globus Finanza.pdfglobusfinanza
 
Uae-NO1 Black Magic Specialist In Lahore Black magic In Pakistan Kala Ilam Ex...
Uae-NO1 Black Magic Specialist In Lahore Black magic In Pakistan Kala Ilam Ex...Uae-NO1 Black Magic Specialist In Lahore Black magic In Pakistan Kala Ilam Ex...
Uae-NO1 Black Magic Specialist In Lahore Black magic In Pakistan Kala Ilam Ex...Amil baba
 

Recently uploaded (20)

OAT_RI_Ep18 WeighingTheRisks_Mar24_GlobalCredit.pptx
OAT_RI_Ep18 WeighingTheRisks_Mar24_GlobalCredit.pptxOAT_RI_Ep18 WeighingTheRisks_Mar24_GlobalCredit.pptx
OAT_RI_Ep18 WeighingTheRisks_Mar24_GlobalCredit.pptx
 
2024-04-09 - Pension Playpen roundtable - slides.pptx
2024-04-09 - Pension Playpen roundtable - slides.pptx2024-04-09 - Pension Playpen roundtable - slides.pptx
2024-04-09 - Pension Playpen roundtable - slides.pptx
 
Banking: Commercial and Central Banking.pptx
Banking: Commercial and Central Banking.pptxBanking: Commercial and Central Banking.pptx
Banking: Commercial and Central Banking.pptx
 
Building pressure? Rising rents, and what to expect in the future
Building pressure? Rising rents, and what to expect in the futureBuilding pressure? Rising rents, and what to expect in the future
Building pressure? Rising rents, and what to expect in the future
 
AnyConv.com__FSS Advance Retail & Distribution - 15.06.17.ppt
AnyConv.com__FSS Advance Retail & Distribution - 15.06.17.pptAnyConv.com__FSS Advance Retail & Distribution - 15.06.17.ppt
AnyConv.com__FSS Advance Retail & Distribution - 15.06.17.ppt
 
Uk-NO1 Amil baba in pakistan Amil Baba in Karachi Black Magic Islamabad Kala ...
Uk-NO1 Amil baba in pakistan Amil Baba in Karachi Black Magic Islamabad Kala ...Uk-NO1 Amil baba in pakistan Amil Baba in Karachi Black Magic Islamabad Kala ...
Uk-NO1 Amil baba in pakistan Amil Baba in Karachi Black Magic Islamabad Kala ...
 
Financial Preparation for Millennia.pptx
Financial Preparation for Millennia.pptxFinancial Preparation for Millennia.pptx
Financial Preparation for Millennia.pptx
 
Financial analysis on Risk and Return.ppt
Financial analysis on Risk and Return.pptFinancial analysis on Risk and Return.ppt
Financial analysis on Risk and Return.ppt
 
ekthesi-trapeza-tis-ellados-gia-2023.pdf
ekthesi-trapeza-tis-ellados-gia-2023.pdfekthesi-trapeza-tis-ellados-gia-2023.pdf
ekthesi-trapeza-tis-ellados-gia-2023.pdf
 
ΤτΕ: Ανάπτυξη 2,3% και πληθωρισμός 2,8% φέτος
ΤτΕ: Ανάπτυξη 2,3% και πληθωρισμός 2,8% φέτοςΤτΕ: Ανάπτυξη 2,3% και πληθωρισμός 2,8% φέτος
ΤτΕ: Ανάπτυξη 2,3% και πληθωρισμός 2,8% φέτος
 
Hello this ppt is about seminar final project
Hello this ppt is about seminar final projectHello this ppt is about seminar final project
Hello this ppt is about seminar final project
 
What is sip and What are its Benefits in 2024
What is sip and What are its Benefits in 2024What is sip and What are its Benefits in 2024
What is sip and What are its Benefits in 2024
 
NO1 Certified Black Magic Specialist Expert In Bahawalpur, Sargodha, Sialkot,...
NO1 Certified Black Magic Specialist Expert In Bahawalpur, Sargodha, Sialkot,...NO1 Certified Black Magic Specialist Expert In Bahawalpur, Sargodha, Sialkot,...
NO1 Certified Black Magic Specialist Expert In Bahawalpur, Sargodha, Sialkot,...
 
Global Economic Outlook, 2024 - Scholaride Consulting
Global Economic Outlook, 2024 - Scholaride ConsultingGlobal Economic Outlook, 2024 - Scholaride Consulting
Global Economic Outlook, 2024 - Scholaride Consulting
 
Introduction to Health Economics Dr. R. Kurinji Malar.pptx
Introduction to Health Economics Dr. R. Kurinji Malar.pptxIntroduction to Health Economics Dr. R. Kurinji Malar.pptx
Introduction to Health Economics Dr. R. Kurinji Malar.pptx
 
The Inspirational Story of Julio Herrera Velutini - Global Finance Leader
The Inspirational Story of Julio Herrera Velutini - Global Finance LeaderThe Inspirational Story of Julio Herrera Velutini - Global Finance Leader
The Inspirational Story of Julio Herrera Velutini - Global Finance Leader
 
Money Forward Integrated Report “Forward Map” 2024
Money Forward Integrated Report “Forward Map” 2024Money Forward Integrated Report “Forward Map” 2024
Money Forward Integrated Report “Forward Map” 2024
 
Crypto Confidence Unlocked: AnyKYCaccount's Shortcut to Binance Verification
Crypto Confidence Unlocked: AnyKYCaccount's Shortcut to Binance VerificationCrypto Confidence Unlocked: AnyKYCaccount's Shortcut to Binance Verification
Crypto Confidence Unlocked: AnyKYCaccount's Shortcut to Binance Verification
 
10 QuickBooks Tips 2024 - Globus Finanza.pdf
10 QuickBooks Tips 2024 - Globus Finanza.pdf10 QuickBooks Tips 2024 - Globus Finanza.pdf
10 QuickBooks Tips 2024 - Globus Finanza.pdf
 
Uae-NO1 Black Magic Specialist In Lahore Black magic In Pakistan Kala Ilam Ex...
Uae-NO1 Black Magic Specialist In Lahore Black magic In Pakistan Kala Ilam Ex...Uae-NO1 Black Magic Specialist In Lahore Black magic In Pakistan Kala Ilam Ex...
Uae-NO1 Black Magic Specialist In Lahore Black magic In Pakistan Kala Ilam Ex...
 

IPO Task Force

  • 1. Rebuilding the IPO On-Ramp Putting Emerging Companies, Investors and the Job Market Back on the Road to Growth October 20, 2011 Confidential   1  
  • 2. Agenda IPO Task Force Members IPOs In Decline Last 15 Years IPOs Support Innovation & Create Jobs Structural & Regulatory Elements Impacting IPOs Four Simple Steps to Tilt Balance Back Confidential   2  
  • 3. IPO Task Force Members Venture Capitalists Securities Attorneys Kate Mitchell, Scale Venture Partners, Joel Trotter, Latham & Watkins Task Force Chairman Steve Bochner, Wilson, Sonsini, Goodrich Mark Gorenberg, Hummer Winblad & Rosati Partners Academicians/Accountants Tom Crotty, Battery Ventures Bill Sahlman, Harvard School of Business Public Investors Carol Stacey, S.E.C. Institute Jeff Cardon & Karey Barker, Wasatch Chuck Robel, private investor & retired Advisors head of PWC Tech Practice Henry Ellenbogen, T. Rowe Price Investment Bankers Entrepreneurs Paul Deninger, Evercore Magid Abraham Ph.D., CEO, Comscore Carter Mack, JMP Securities Josh James, former CEO, Omniture Brent Gledhill & Brett Paschke, William Desh Deshpande, former CEO and co- Blair founder Cascade Communications & Additional Support From: Sycamore Networks and co-chair of NACIE Investors, CEOs, NYSE, NASDAQ, NVCA Confidential   3  
  • 4. Emerging Company IPOs Have Dropped Dramatically Confidential   4  
  • 5. Pre-1999 Avg Post-1999 Avg 900 547 IPOs / Year 192 IPOs / Year 800 Deal size >= $50M 700 Deal size < $50M 600 Number of 500 Initial Public Offerings 400 300 200 100 0 Pre-1999, Majority of IPOs Were Done for Emerging Growth Companies Sub $50M Deal-Sizes Were More Common than Larger Deals Shift to Larger Deals Impacts IPO Ecosystem: Issuers, Small IBs, Institutional Buyers Source: JMP Securities, Dealogic, Capital Markets Advisory Partners, Grant Thornton Confidential   5  
  • 6. Average Age Since Company Inception (in Years) at IPO 4.8 Years Early 1980s Median Age at IPO 9.4 Years Since 2007 Source: Thomson Reuters/National Venture Capital Association Confidential   6  
  • 7. Shift to M&A Resulting in Fewer U.S. Jobs 100% 90% 80% 70% 60% 50% %  IPO 40% %  M&A 30% 20% 10% 0% Source: Thomson Reuters/National Venture Capital Association (Based on number of exits per year; M&A exits are for private company sales only.) Confidential   7  
  • 8. Emerging Growth IPOs Are Critical to The U.S. Economy Confidential   8  
  • 9. Innovative Startups Become Market Leaders Web High Tech Retail / Services Life Science Cleantech Confidential   9  
  • 10. Innovative Companies Create Jobs and Grow Quickly VC-Backed U.S. Revenues As a % of Total U.S. GDP Outpaces 2008-2010 ($T) in 2008 - 2010 Total U.S. Sales Growth 21% 2000 2003 2006 2010 VC-Backed VC-Backed Total Revenue Growth Growth Former Startups Now Generate 21% of U.S. GDP & Were Able To Grow Even Through The Recent Recession Source: Venture Impact 2007, 2008, 2009 & 2010 by IHS Global Insight Confidential   10  
  • 11. IPOs Finance Significant Job Creation Post-IPO Employment Growth Pre-IPO Employment Growth 92% of Job Growth in a Company Occurs Post-IPO 86% Post-IPO Job Growth Per August 2011 Survey of 2006+ IPOs Source: Venture Impact 2007, 2008, 2009 & 2010 by IHS Global Insight; IPO Task Force August 2011 CEO Survey Confidential   11  
  • 12. Elements of the IPO Problem Confidential   12  
  • 13. Challenges for Emerging Growth Company IPOs Increased Regulation Makes IPO More Costly Supply Down Regulations Favor High-Volume, Low-Cost Trades Channel Evolution Shift In Economics From Investing to Trading Weak Link To IPO Shares Allocated to Traders vs. Investors Demand Decrease in Information Available Pre- & Post-IPO Confidential   13  
  • 14. Supply: Post-IPO CEO Survey Costs of Going and Staying Public Are High Average Cost $2.5M to Go Public Annual Cost $1.5M to Stay Public Costs Including SOX, Legal, Accounting Source: IPO Task Force August 2011 CEO survey of incremental IPO costs from 35 CEOs of companies that went public since 2006; Confidential   14  
  • 15. Channel Focus: Trading Drives Revenue For Largest Investment Banks Typical Large Bank Typical Boutique Bank Large Bank Client Base Dominated by Traders vs. Investors High Frequency Trading Up From <25% to 75% of Volume Over Last 5 Years Research Focused on Large-Cap Stocks That Drive Revenue Source: JMP Securities Confidential   15  
  • 16. Demand Exists: Emerging Company IPOs Deliver Returns To Investors Myth: Small-Cap IPOs Lag in Performance Truth: Small-Cap Performance Equal or Exceed Large-Cap IPOs Post-­IPO Market Cap 1 Day 1 Month 3 Months 6 Months 1 Year $200-­$500 Average 27.5% 34.8% 45.1% 43.9% 33.5% $1B or more Average 35.9% 39.7% 37.7% 32.8% 28.5% Investor Interviews Showed: Strong Performance & Demand for IPOs Challenge to Get Allocation of Shares Decline in Availability of Research for IPO Companies Source: JMP Securities, Dealogic Note: Includes all IPOs from 1/1/2001 9/30/2011 Confidential   16  
  • 17. IPO Task Force Draft Recommendations Confidential   17  
  • 18. Four Draft Recommendations to Stimulate IPOs Increase Supply Companies Improve Availability of Information for Investors Improve Channel Educate Issuers on How to Work With Banks Effectively Incent Demand One-Time IPO Tax Incentive to Buy & Hold IPO Shares Confidential   18  
  • 19. Create a New Category of Issuer: Emerging Growth Company Increase Supply Measurement begins at IPO Ends with 10-K for the earliest year in which: Annual Gross Revenue Exceeds $1 Billion Company Becomes Well-Known Seasoned Issuer Improve Channel Fifth Anniversary of IPO Effective Date that provides scaled regulation (details next slide) Builds on Existing Scaled Disclosure Rules for Smaller Reporting Companies Incent Demand Status is Temporary & Transitional Impacts 14% of Companies & 3% of Total Market Capitalization Today Goal: Reduced Costs For IPO Candidates While Maintaining Investor Protection Confidential   19  
  • 20. The Solution: Two years of audited financial statements at IPO instead of three Increase Supply Financial statements & selected financial data accumulate until full presentation at Year 3 Scaled MD&A and executive comp disclosure Exemption from: Improve Channel Auditor attestation of ICFR SOX 404(b) Say-on-pay, say-on-frequency and say-on-parachute votes Conflict minerals disclosure requirements Pay-for-performance disclosure requirements Incent Demand CEO pay ratio requirements Modifications and Extended Adoption of New FASB Standards & PCAOB Rules Transition Confidential   20  
  • 21. The Solution: Improve Investor Communications Improve Availability and Flow of Information to Increase Supply Investors for IPO Modernize Securities Act Framework Many restrictions are vestiges of a paper-based world Improve Channel Release No. 33- Opportune time to build on new approaches introduced in 2005 Incent Demand Goal: permit IPO candidates to communicate with investors while maintaining investor protection Confidential   21  
  • 22. The Solution: Improved Investor Communications Improve Availability and Flow of Information to Investors Greater Role for Research During Capital Formation Process Increase Supply Maintain principles & codes of conduct including separation of banking and research Prominent disclosure regarding underwriter relationship Modifications to Banking Research Expand existing research safe harbors Improve Channel Permit broker-dealers to initiate coverage without being Eliminate unnecessary quiet periods Eliminate unnecessary restrictions on analyst communication Modifications to Company Disclosures Incent Demand Permit confidential initial filings & review for U.S. issuers Expand permissible pre-filing communications Permit broader pre-filing investor communications Confidential   22  
  • 23. The Solution: Educate Issuers On Effective Use of Banking Channel to Build New Investor Base Educate Issuers About the New Capital Markets Increase Supply Environment Industry Participants, Not Policy Makers, Are Responsible For Education Help Emerging Growth Companies Become Better Consumers of Investment Banking Services Improve Channel Improved Education and Increased Involvement for Management and Board Choice of Balanced Investment Banking Syndicate Incent Demand Improve Practice of Investor Communications Goal: To Reconnect Buyers and Sellers of Small Cap Stocks More Efficiently Confidential   23  
  • 24. The Solution: Demand Side Incentives Increase Supply Incent Buyers To Participate In IPOs Improve Channel Lower the Capital Gains Rate for Buyers of Newly Issued Stock if They Hold It for Two Years Goal: To Incentivize Investors to Participate in Incent Demand Emerging Growth IPOs Confidential   24  
  • 25. Appendix Confidential   25  
  • 26. 3% of Total Market Capitalization Sources: Dealogic, Capital IQ, World Federation of Exchanges Confidential   26  
  • 27. The Regulatory Cascade Accounting & Compliance From Policy Makers & 1996 - Today Industry 1996 Advent of Electronic Trading 1999 Gramm-Leach-Bliley Overturns Separation Of Commercial & Investment Banking 2001 Decimalization Introduced For all Exchange Traded Shares 2002 Sarbanes-Oxley Act 2002 Today Additional Accounting & Compliance from Policy Makers & Industry 2003 Global Analyst Settlement Separates Research & Banking 2009 - Today Dodd-Frank Act Confidential   27  
  • 28. CEO Survey: IPOs Fuel Growth But Are Increasingly Difficult Confidential   28  
  • 29. Pre-IPO CEOs Target IPO To Finance Growth Motivation for Pre-IPO Companies Source: IPO Task Force August 2011 CEO Survey Confidential   29  
  • 30. Managing IPO Costs and Compliance Was Challenging Source: IPO Task Force August 2011 CEO Survey Confidential   30  
  • 31. Public Company CEOs: IPOs Are Important But Increasingly Difficult Agree Neutral Disagree Strong & Accessible IPO Market Is Important 100% 0% 0% to U.S. Economy & Global Competitiveness U.S. IPO Market Is Accessible for Small 23% 11% 66% Companies It Is Not as Attractive an Option to Go Public 86% 3% 12% Today as It Was in 1995 Going Public Was a Relatively Painless 17% 14% 69% Experience Going Public Has Been a Positive Event in My 83% 14% 3% Company's History Value of IPO: 86% Growth In Employees Source: IPO Task Force August 2011 CEO Survey Confidential   31  
  • 32. Rebuilding the IPO On-Ramp Putting Emerging Companies, Investor and the Job Market Back on the Road to Growth October 20, 2011 Confidential   32