WASHINGTON, DC – The National Venture Capital Association (NVCA) today came out in support of H.R. 4139, the Fostering Innovation Act. Sponsored by Reps. Kyrsten Sinema (D-AZ) and Michael Fitzpatrick (R-PA), H.R. 4139 would reduce the significant and sometimes overwhelming costs for small capitalization companies to go public, encouraging more startups to access the public markets.
“The ability of startups to access the capital markets to grow is critical to the U.S. economy. In fact, research has shown that 92 percent of job growth occurs after a company’s initial public offering (IPO). But the United States is unfortunately averaging less than half the number of IPOs annually post-2000 than we did before, a very troubling statistic for the country’s economic health,” said Bobby Franklin, President and CEO of NVCA, in a letter of support to House Speaker Paul Ryan (R-WI) and Democratic Leader Nancy Pelosi (D-CA). “The total number of public companies in America has dropped by half in only twenty years, which is partly due to a dramatic reduction in the number of IPOs. Simply put, the U.S. public capital markets are no longer hospitable to startups seeking capital to scale into the successful firms of tomorrow.”
“The Jumpstart Our Business Startups Act (JOBS) was a great first step to reopening our public capital markets to startups and small capitalization companies. But structural challenges remain that discourage so many of our nation’s startups from going public,” added Franklin. “One of those challenges is the enormous cost of going public, in large part due to compliance with Sarbanes-Oxley regulations. Importantly, the costs imposed by these regulations fall harder on small capitalization companies than they do large companies, which is why the Fostering Innovation Act is so important.”
You can download the full letter of support here.
