IPOs, IPOs, IPOs

Venture Captalist Tim Draper, along with other notorious investors, are on the way to fund a private exchange that would allow them (net worth > 100million) to trade stocks at early stages of the companies they fund.

In his own words, "it would allow enterpreneurs to get a little bit of liquidity" and show that the companies have value, ultimately aiming at an IPO (Initial Public Offering).

For those who do not know, in simple terms an Initial Public Offering is what investors are able to do in order to raise money and make 'huge' returns in relation to their initial investment. In other words, the company would be on Wall Street and their stocks would be open to the public.

In order to execute his plans, Draper will launch www.xchanged.com in September only allowing start-ups with at least $20 million in revenue to participate.

His strategy and plans make a little bit of sense, since any company with $30 million in revenue and $4 million in profit can go public. But ultimately Draper is finding ways of getting out of a frozen IPO market, which had no no U.S. venture capital backed company going public for six months until April. Some blame Sarbanes Oxley's guidelines, some the economy, some... well, who knows, but the truth is that the juntion of allt hese things have created a stagnant market that scarres people away from Wall Street and make old-school VCs from Silicon Valley struggle, difficulting their exit from those business and driving companies out of the country to other [easier] markets. As Henry Blodget put it at its best, "Why spend millions of extra dollars a year complying with a law that won't make your investors the tiniest bit safer and might get you thrown in jail for life if you blow a quarter?"

The solution? Well, we know but we don't know. We all have our own views and solutions, but rewriting the Sarbox law would definately help, allowing and increasing freedom in Wall Street, so as to make Investors safer and, consequently, buyers and enterpreneurs.

Well, well, inumerous companies have held their IPOs because of inhospitable markets, just like a record label holds and postpones a CD release... In this case, what is left for us is to hope for better days, or, better still, to take action for better ones.