In Private and Public Eye, We Need Corporate Reform

Every entrepreneur, when launching their business, faces a fundamental decision: Should the company be public or privately owned? This choice shapes your options for leadership, structure, funding, investment, and growth. However, both sides of the coin—public and private—are in need of some serious work according to recent reports released by the U.S. Chamber.

Public Companies: Public markets are essential to the United States economy. They create jobs, maintain competitiveness, stimulate the economy, and help individuals build wealth through investment. Yet, since the late 1990s, the number of publicly traded companies has plummeted by nearly 50%, with initial public offerings (IPOs) at a mere fraction of their historic levels from the 1980s. Recognizing this, the U.S. Chamber has partnered with Nasdaq to develop targeted recommendations aimed at revitalizing public markets and encouraging companies to pursue public ownership.

Private Companies: While private companies operate under a different set of dynamics, they too face mounting regulatory pressures. Excessive and often misaligned requirements can hamper growth, and in some cases, private firms feel compelled to go public prematurely, which may not align with their business goals. The U.S. Chamber’s report, Preserving and Promoting the Private Company Ecosystem, highlights the importance of the ability to choose between public and private markets to keep the American economy competitive.

Go deeper: Here are some of the key points made in the U.S. Chamber’s report:

1. Flexibility in Capital Raising: The report underscores the importance of allowing companies to choose the capital-raising path that best suits their needs. This flexibility has been a cornerstone of the U.S. capital markets, enabling businesses to thrive and adapt to changing market conditions.

2. Investor Protection and Disclosure: The report explains the different risks associated with investing in public versus private companies and how these risks have guided disclosure policies. It highlights the need to preserve regulatory distinctions between the two markets to protect investors and maintain market integrity.

3. Economic Competitiveness: The report argues that maintaining robust public and private markets is essential for the enhanced competitiveness of the U.S. economy. It warns against regulatory overreach that could stifle innovation and limit the ability of companies to raise capital efficiently.

4. Policy Recommendations: The report provides actionable recommendations for policymakers to ensure that the U.S. capital markets remain dynamic and inclusive. It calls for preserving the regulatory distinctions between public and private markets and avoiding measures that could undermine the flexibility companies need to succeed.

WY It Matters: In sum, the health of both public and private markets is critical to sustaining American entrepreneurship, innovation, and economic growth. As advocates for business, we support efforts to protect the freedom to choose the ownership structure that best fits each company’s goals—ensuring Wyoming and the nation remain fertile ground for business success.