IPOs on the Upswing?

In good times or bad, getting access to the capital needed for growth stands as a huge challenge for entrepreneurs.

On April 2, the National Venture Capital Association and Thomson Reuters pointed to some life in the first quarter of this year when it comes to venture-backed initial public offerings.

Specifically, it was reported: "There were 19 venture-backed IPOs valued at $1.5 billion in the first quarter of 2012, which represented a 10 percent increase in dollar value and a 36 percent increase in volume compared to the first quarter of 2011."

The volatility in venture-backed IPOs in recent years has been notable. In 2006, for example, there were 57 such IPOs, followed by 87 in 2007. They then plummeted to 6 in all of 2008 and 12 in 2009. The number rose to 74 in 2010, and then declined back to 53 last year.

If the momentum from the strong first quarter showing - which came after a recent low of five in the third quarter of 2011 and 12 in the fourth quarter - follows through for the rest of the year, that would be a clear plus for the economy.

Of course, the considerable uncertainty swirling around the election, and how a variety of tax issues will eventually come out, have to serve as dampening effects on such activity.

Although, it is worth highlighting a policy point made by Mark Heesen, president of the NVCA. He observed: "The recently passed JOBS Act will grant emerging growth companies temporary but significant regulatory relief during the IPO process, allowing them to focus on accessing capital to grow their businesses."

Clearing away threats of increased tax and regulatory burdens - including the possibility of higher capital gains taxes - would be a plus for the venture capital and IPO marketplaces. In contrast, imposing higher taxes would raise costs and restrain investment activity.

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Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His new book is "Chuck" vs. the Business World: Business Tips on TV.

Senate Small Business Committee Chair is Out-of-Touch

“I mean, somebody made a mistake on this, and it should’ve gone through a committee.” – Quote by U.S. Senator Mary Landrieu, Chair, Senate Committee on Small Business and Entrepreneurship on the JOBS Act, H.R. 3606, – the bill that includes key capital formation provisions supported by SBE Council. (Read the quote in its context here.)

So, Chairwoman Landrieu has become the biggest opponent of H.R. 3606, the JOBS Act. She claims the White House made a mistake in supporting it. As did 407 members of the U.S. House of Representatives when they first voted "yes" for H.R. 2930, the "Entrepreneurs Access to Capital Act" (the crowdfunding bill), and a second time 390 members for the JOBS Act, H.R. 3606, which includes H.R. 2930 as well as several other capital formation bills strongly supported by SBE Council.

There is no reason why the Senate Small Business Committee couldn’t have held hearings on the current crowdfunding space, how it works, why fraud is nonexistent, etc. so she could better understand this marketplace. Crowdfunding has been one of the hottest issues of discussion among entrepreneurs for several years, yet seemingly no interest from a Committee that is supposed to be keeping up with issues of importance to small business. In fact, the Committee has held only two hearings this year in total (one on March 20), according to the hearing schedule posted on its website.

The various provisions of H.R. 3606 were properly vetted in the U.S. House where, again, it received wide bipartisanship support -- TWICE. Chairman Landrieu needs to get out of the beltway bubble to understand the modern entrepreneurial marketplace and the innovation that is taking place to better serve the needs of America's small businesses. Unfortunately, she is standing in the way of entrepreneurs and small business owners who desperately need capital to startup and grow their businesses.

Karen Kerrigan, President & CEO, SBE Council

Some Senators Have No Clue

Very interesting debate in the Senate today on the JOBS Act. It is interesting to watch Senators opposed to the capital formation and crowdfunding provisions of the JOBS Act decry a subject they know absolutely nothing about.

These members have a stone-age view of public policy and how the economy works. In addition, they feign "shock" at the speed the bill passed the House (it was about 11 months) claiming "special interests" had something to do with it. Well, it is small business owners and entrepreneurs behind the movement to make these common sense changes.

Please contact your Senators on Friday and early next week and demand that they pass the JOBS Act! Let them know regulations need to be modernized to allow small businesses to raise capital, grow their businesses and create jobs! You can call the Capitol Hill switchboard at 202-224-3121 -- ask to be connected to your U.S. Senators -- tell them small businesses (and President Obama) support the House passed JOBS Act!

Karen Kerrigan, President & CEO