The Vanishing American Corporation

CHAPTER 8THE LAST GASP OF THE IPO MARKET

THE RANGE OF activities for which the most economical format is to organize as a corporation and sell shares to the public is rapidly diminishing. The parts needed to create an enterprise are often available off the shelf, which allows creating pop-up ventures that are cheaper and nimbler than established corporations. Yet some companies are still doing initial public offerings (IPOs), that is, selling shares to the public in what used to be called a “capital raising.” Why?

IPOs offer founders of companies and their financial backers an opportunity to cash in. Going public allows venture capitalists to recoup their investment, lets early employees capture the rewards they were offered, and creates a currency ...