Tech Companies Avoid the “Going Public” Exit

The New York Times hosted an article about the drastic decrease in the initial public offerings for technology companies. It mentioned that over the last two years only 18 tech companies have gone public, when during the prior two years the count was 143. The underlying cause of this statistics is the tightening of the government monitoring towards the public companies. 
 It seems that the fierce need for compliance with the SOX Act along with other government regulations has caused for a lot of entrepreneurial board members to be replaced with corporate lawyers. Public companies become so focused on the paperwork that their management teams don’t have time to focus on their business strategy and competitive positioning. Also, the imposed restrictions on the executive compensations have caused a lot of entrepreneurs to steer the company’s exit strategy away from the IPO exit, and look for the M&A one. 
 However, there are technology companies with venture backed funding that are looking for their place on the Nasdaq. The IPO has always been the more lucrative exit strategy, and as a result, according to the same NY Times article, currently there are twenty nine filings with the SEC by companies that want to go public.