Private Companies

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At the Economic Club of New York, in keynote remarks, Chair Clayton reviewed the Securities and Exchange Commission’s recent initiatives.  He highlighted the Commission’s adoption of Regulation Best Interest (Reg BI).  Repeating a common theme, Chair Clayton discussed concerns relating to increased reliance on the private capital markets.  Clayton noted that, while twenty-five years ago,…

McKinsey Global Private Markets Review 2019 provides important data on the private markets.  The report notes that private equity’s net asset value has grown more than sevenfold since 2002, which is twice as fast as global public equities.  Private markets, the report concludes, have gone from alternative to mainstream.  See the full report here: https://mck.co/2Ux3IkZ

A recent research report published by Goldman Sachs reviews private market value creation compared to public market creation.  Echoing the trends noted in other publications, the report notes the increasingly important role of venture capital as an asset class.  The growth in venture funding has contributed to companies remaining private longer.  The report notes that…

In a recent report, the Nasdaq Private Market (NPM) provided data regarding transaction activity for private company securities.  On NPM, the total sponsored liquidity program value increased from $3.2 billion in 51 programs in 2017 to $12.0 billion in 79 programs in 2018. There were 46 third-party tender offers in 2018 compared to 23…

In a recently published white paper Andrew Kroculick and Julia Brezing of Nasdaq Private Market provide an overview of the auction processes supported by the Nasdaq Private Market.  Auctions may be a useful alternative to the more traditional private tender offer.  Particularly given concerns related to information asymmetries, an auction or an auction-based component to…

In a recent paper titled, “Public or Private Venture Capital?” author Darren M. Ibrahim compares the relative benefits associated with reliance on private capital to fund start-ups and emerging companies with “public” venture capital in the form of securities exchanges like the London Alternative Investment Market, or AIM. The author looks at three such venture…

In a recent paper, “Scaling Up: the Implementation of Corporate Governance in Pre-IPO Companies,” authors David F. Larcker and Brian Tayan review governance practices and how these evolve in the lead-up to an IPO. The authors studies 47 companies that completed IPOs from 2010 to 2018. On average, the companies in the sample set were…

A registered direct offering (RDO) is a public offering of securities that is sold on a best efforts basis by a placement agent that is engaged by the issuer to introduce the issuer to potential purchasers. An RDO is generally targeted to a select number of accredited and institutional investors, although it may be sold…