The Deregulation of the Private Equity Markets and the Decline in IPOs

Michael Ewens and Joan Farre-Mensa

No 26317, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The deregulation of securities laws|in particular the National Securities Markets Improvement Act (NSMIA) of 1996|has increased the supply of private capital to late-stage private startups, which are now able to grow to a size that few private firms used to reach. NSMIA is one of a number of factors that have changed the going-public versus staying-private trade-off, helping bring about a new equilibrium where fewer startups go public, and those that do are older. This new equilibrium does not reflect an IPO market failure. Rather, founders are using their increased bargaining power vis-a-vis investors to stay private longer.

JEL-codes: G24 G28 G32 (search for similar items in EconPapers)
Date: 2019-09
New Economics Papers: this item is included in nep-cfn, nep-ent and nep-fmk
Note: CF PR
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Citations: View citations in EconPapers (17)

Published as Michael Ewens & Joan Farre-Mensa & Andrew Karolyi, 2020. "The Deregulation of the Private Equity Markets and the Decline in IPOs," The Review of Financial Studies, vol 33(12), pages 5463-5509.

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Related works:
Journal Article: The Deregulation of the Private Equity Markets and the Decline in IPOs (2020)
Working Paper: The Deregulation of the Private Equity Markets and the Decline in IPOs (2019)
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