Public, Private, Acquired

Introduction

Securities regulation (SecReg) creates a distinction between “public” companies, offerings, and funds, which are subject to special rules intended to protect ordinary investors, and “private” ones, which are not. As private markets have overtaken public ones, this foundational regulatory distinction has come under pressure.

The Securities and Exchange Commission (SEC) has devoted enormous attention to these changes. Republican Commissioners typically blame over-regulation of public markets and propose deregulation to restore the equilibrium.1 Democratic Commissioners typically blame under-regulation of private markets and propose increased regulation on that side of the line.2 But both sides rely on the same implicit model, in which public and private markets compete for startups and securities regulation determines the relative costs and benefits of going public and staying private.3

The standard model is incomplete. Startups don’t face a binary choice between going public and staying private. They face a trinary choice between going public, staying private, and being acquired. And in the last several decades, startups have increasingly chosen the third option.4 The decline of public companies is in large part a story of startups choosing acquisitions over listings.5

SEC Commissioners often treat acquisitions as an exogenous variable outside their control. For example, one Commissioner recently claimed that a startup’s choice to be acquired is “independent of regulation.”6 We respectfully disagree. Securities regulation shapes a startup’s willingness to accept an acquisition offer by making the relevant alternatives—going public or staying private—more or less attractive.7 All else equal, as regulation increases the cost of raising capital, accessing liquidity, or making disclosures—in either public or private markets—more startups will decide to sell out.

The aggregate trend of startups exiting by acquisition could potentially be socially costly. When more startups choose to be acquired, there are fewer new entrants to compete with incumbents and possibly diminished incentives for innovation.8 A smaller number of entrepreneurial firms in public and private markets may leave investors with fewer opportunities for diversification.9 And when startups choose being acquired over going public, investors and society may have less transparency into their operations.10

The SEC should aim to create conditions in which independent companies can thrive. But pursuing that goal may require making tradeoffs. For example, streamlining the IPO process would reduce the most salient advantage of a trade sale and might nudge more startups toward a listing, but could sacrifice some degree of investor protection.11 Our primary goal is not to advocate for any particular proposal, but to illuminate these tradeoffs.

Researchers have already moved beyond the public/private dichotomy to study how securities regulation impacts startups’ choices to be acquired or remain independent.12 Our goal is to help policymakers understand the implications of that research.

The Essay proceeds in five parts. Part I describes how SEC Commissioners typically frame the issue—a two-way regulatory competition between public and private markets. Part II introduces an alternative framing—a three-way choice among going public, staying private, or being acquired. Part III shows that the level of startup acquisitions is not an exogenous variable—securities regulation can and does have important effects on whether startups get acquired or remain independent. Part IV observes how the trend toward acquisitions could lead to less competition and innovation, fewer opportunities for diversification, and reduced transparency. Part V considers how the SEC might reverse this trend.

I.    Public/Private

Perhaps no topic has occupied more attention in the SecReg universe than the “decline of public markets.” For policymakers, scholars, and practitioners, the traditional separation between public and private companies, offerings, and funds represents a foundational, even sacred,13 commitment of the 90-plus-year-old regime. As the explosive growth of private markets, and decline (by some measures) of public ones, has put that commitment under pressure, there’s been a massive effort to understand what’s behind this upheaval and how to restore the old equilibrium.

At the SEC, discussion tends to assume that growing startups face a two-way choice: go public or stay private. Commissioners discuss this issue as a zero-sum regulatory competition between public and private markets, in which changes to one side impact the flow of startups to the other. Both Republican and Democratic Commissioners agree that securities regulation has driven companies away from IPOs and listings by altering the pre-existing regulatory equilibrium between public and private, tipping the balance toward the latter.14

A.   Deregulation of Private Markets

For Democratic Commissioners, the culprit behind the decline of IPOs and public markets is deregulation of private markets, which has made it too easy and attractive for firms to raise capital while remaining private. For instance, in 2020, then-Commissioner Allison Herren Lee said that “compelling scholarship” had shown that “the continued deregulation of private capital-raising undermines incentives to go public.”15 A year later, Lee likewise attributed the “diminishing incentives to raise capital in public markets” to decisions by Congress and the SEC that “steadily relaxed restrictions around private markets.”16

In 2023, Commissioner Caroline Crenshaw blamed the decline of public companies on “decades of legal, regulatory, and market developments” that mean “private companies now have access to increasing amounts of private capital, inflating their sizes and significance to investors and our economy, and all without the concomitant safeguards built into the public markets.”17 And, in September 2025, Crenshaw endorsed the argument “that deregulation in the private markets has encouraged capital to skirt the public markets and its required transparency” and concluded that “the reason private markets are more attractive than public markets is, at least in part, that we have not adequately adapted our regulatory regime to address the private markets as they have grown to exist today.”18

It is true that Congress and the SEC have loosened restrictions on raising capital and reselling shares in private markets.19 And a study of one of these major deregulatory actions—the National Securities Markets Improvement Act of 1996—finds that it better explains the decline of IPOs and listings than other leading explanations.20 But it’s not the full story.

B.    Increasing Regulation of Public Markets

For Republican Commissioners, the main culprit is overregulation of public markets, which they say has pushed companies away from IPOs and listings.

For instance, former Chair Jay Clayton called on the SEC to respond to the “growing concern” about the rise of private markets by undertaking deregulatory reforms to “revitalize” public markets and “increase the attractiveness of our public capital markets as places for companies to raise capital.”21

Commissioner Hester Peirce similarly attributed the decline of IPOs to “the rising costs of being a public company”22; blamed “the regulatory requirements the Commission has imposed on public companies” for “dissuading companies from going public”23; and warned that “[t]he once aspirational goal of becoming a public company seems to have lost its luster but we can change that by identifying and addressing the hurdles to going and staying public.”24

Most recently, current SEC Chair Paul Atkins announced plans to “make IPOs great again” and make “being a public company an attractive proposition for more firms” by “eliminating compliance requirements that yield no meaningful investor protections, minimizing regulatory uncertainty, and reducing legal complexities.”25 In October 2025, Atkins explained that the decline of IPOs and public listings was “a signal that the costs of being a public company . . . have negatively impacted the vibrancy of our capital markets” and have “pushed entrepreneurs to seek capital elsewhere, either in the private markets or competing jurisdictions”.26

It is true that Congress and the SEC have added substantial regulatory burdens to the IPO process and to public companies generally over the last several decades.27 And some research finds that Sarbanes-Oxley (SOX) pushed firms away from IPOs,28 although that has been questioned.29 But like the deregulation of private markets theory, the over-regulation of public markets theory is not the full story.

C.   The Underlying Consensus

The opposing views of Republican and Democratic Commissioners are actually based on the same implicit model, as illustrated by the figures below. Figure 1 represents the baseline case in this bipartisan model, in which a startup faces a choice between two options: go public or stay private.

Figure 1: Binary Model

Baseline Scenario

 

Figure 2 shows the standard model’s view of the current situation, in which the startup has been nudged closer to the “stay private” option, whether by over-regulation of public markets (Republican view) or deregulation of private ones (Democratic view).

Figure 2: Binary Model
Public Market Over-regulation / Private Market Under-regulation

And Figure 3 shows the standard model’s view of the world after enactment of proposed reforms—either deregulation of public markets (as Republicans propose) or re-regulation of private markets (as Democrats propose)—in which the startup is nudged toward going public.30

Figure 3: Binary Model

Private Market Crackdown / “Make IPOs Great Again”

II.   Independent/Acquired

The standard model is incomplete. Startups don’t have two options. They have three: go public, stay private, or get acquired.

A.    A Trinary Choice

The standard model characterizes the choice startups face as one about where to raise capital for growth. And it’s true that there are only two options for raising capital—public markets or private markets—if the startup remains independent. But the startup can also choose to get acquired, which obviates the need to raise external capital. The former startup can continue to grow inside the acquirer by relying on the acquirer’s internal cash flows or the acquirer’s external capital-raising.

When you characterize the choice startups face as one about where to access liquidity for its founders, employees, and investors, it’s easier to see that there are three options. First, the startup can go public, so its shareholders can sell their shares in the stock market. Second, the startup can facilitate secondary transactions, so its shareholders can sell their shares in the private market. Third, the startup can agree to be acquired, so its shareholders can receive cash or stock from the acquirer.

This is closer to how the human decisionmakers in startups—founders and venture capitalists (VCs)—actually think about their choices.31 Of course, founders and VCs would like to see their startups raise capital and grow, even if it means that their equity will be diluted. But founders need liquidity to convert their paper wealth to cash.32 VCs need liquidity to distribute returns to their limited partners within a fixed window.33 An IPO, a secondary sale, or an acquisition are all viable paths to liquidity.

Figure 4 depicts the trinary model:

Figure 4: Trinary Model

Baseline Scenario

B.    The Rise of Acquisitions

The three-sided model can better explain changes in the number and size of firms in the public and private markets. The increasing popularity of acquisitions is a major contributor to the decline of IPOs and public listings. As Figure 5 below illustrates, startups have overwhelmingly chosen acquisitions over IPOs since the dot-com bust at the turn of the century:34

Figure 5

And the relative rise of acquisitions isn’t just a byproduct of the decline in IPOs. They are rising in absolute numbers. Until antitrust enforcers started to crack down on startup acquisitions in the last several years, acquisitions had been steadily growing. Figure 6 illustrates this trend:35

Figure 6

Empirical studies confirm that M&A is an essential part of the “declining IPO” phenomenon. One recent study shows that the entire US “listing gap” since the 1990s would be erased if all the private companies that were acquired were reclassified as listings.36 Another finds evidence that increased merger activity explains far more of the listing gap than the increase in PE activity.37 Even though the number of public companies has declined, the market value of public companies has risen faster than the rest of the economy38 in part because public companies have been acquiring the startups that in a prior era might have gone public.

C.    A Blurry Line

The pace of startup acquisitions has declined in the last few years.39 But a close examination suggests that the dynamics that made startups seek out acquisitions haven’t changed. What has changed is that, starting in 2019 and accelerating under Biden, the Federal Trade Commission (FTC) and U.S. Department of Justice (DOJ) Antitrust Division cracked down on anticompetitive startup acquisitions—challenging far more deals than they had before.40 For the first time in decades, the number of startup acquisitions fell.41

But startups didn’t respond to the antitrust crackdown by rushing to IPO.42 Instead, as one of us has shown elsewhere, they looked for new alternative pathways to liquidity and growth. Some of the hot AI startups most likely to be in antitrust enforcers’ crosshairs responded by taking minority investments from Big Tech that were larger than traditional corporate VC investments.43 OpenAI, for example, has taken at least $10 billion from Microsoft44 and later announced a deal of up to $100 billion from Nvidia.45 (More recently, OpenAI has announced plans for an IPO.46) OpenAI’s rival Anthropic has taken $3 billion from Google and $8 billion from Amazon.47 Each of these deals has been coupled with a commercial partnership that draws the companies’ interests together, potentially reducing their incentives to compete with their partners.48

Other startups and their would-be acquirers have responded with a new kind of transaction called a “reverse acquihire.”49 In these deals, a large tech company hires away the engineering team of a startup.50 Then it makes a payment to the shell of the startup that is ostensibly for a license to the startup’s technology. But the startup doesn’t use that cash to grow. It simply transfers the cash to its shareholders. A reverse acquihire is an acquisition in substance but not form. Big Tech gets the only assets that matter—the talent and intellectual property. Shareholders get paid out.51

III. SecReg Has Contributed to the Acquisition Trend

Many Commissioner statements on the public/private line ignore the role of startup acquisitions altogether.52 Others acknowledge the rise of acquisitions but suggest that it is unrelated to securities regulation.

For example, Commissioner Crenshaw acknowledged that the increase in startup acquisitions is arguably “the true cause[] of this shift” away from IPOs, but characterized this increase as a “market force” that is “beyond regulation.”53 Commissioner Lee denied that over-regulation of public markets caused the decline of IPOs and pointed instead to alternative explanations, like the fact that many “small companies may find it more beneficial to be acquired by a larger company in the same industry rather than going public”—which assumes the preference for acquisitions is unrelated to over-regulation of public markets.54

Others characterize the acquisition trend as outside the SEC’s jurisdiction. In early 2025, then-acting Chair Mark Uyeda noted that both IPOs and M&A exits were down, blamed the decline in acquisitions on “increased antitrust enforcement,” and concluded that “[w]hile I have to defer to the Department of Justice and the Federal Trade Commission on antitrust enforcement, there are things that the Commission can do to help make IPOs attractive again.”55

The apparent consensus among Commissioners is that the level of startup acquisitions is beyond their purview. We disagree.

Securities regulation can and does impact the level of startup acquisitions both indirectly, through regulation of the go-public process, public markets, and private markets, and directly, through regulation of public company acquisitions. We walk through each of those “levers” below.

To be clear, our claim is not that securities regulation is the only cause of the acquisition trend, just one contributor. Another important contributor is the set of industrial and technological changes that have increased economies of scale and scope.56 For instance, it may be that companies built around large internet platforms—Amazon’s marketplace, Apple’s App Store, Google’s search engine, and social networks like Facebook—are able to extract more value from many startups’ technologies by attaching them to their platforms than these startups would be able to extract by remaining independent.57

But our point here is that this and other similarly benign, market-driven explanations likely cannot account for all of the increase in acquisitions. The evidence below indicates that, separate and in addition to all of these other drivers, securities regulation has itself increased the number of firms who have chosen to sell out rather than remain independent. At a minimum, the subset of increased merger activity that appears to be directly traceable to securities regulation warrants some concern.

SecReg’s effects on startup acquisitions aren’t always simple or easily predictable. The interactions between public, private, and acquired are dynamic and complex.58 Some regulatory interventions intended to boost one channel end up boosting another. But complexity shouldn’t give regulators a license to ignore these effects.

A.   Regulation of the Going Public Process

Securities regulation affects the level of startup acquisitions by controlling the process of going public. As SecReg makes this process slower, more uncertain, and more costly, this would send startups looking for speedier, more certain, and less costly alternatives, like acquisitions.

For instance, the SEC staff review of IPO filings adds an average of five months to the IPO timeline, a delay that may play some role in pushing startups towards the speedier and more determinate acquisition process.59 SEC review of IPOs used to be much shorter; its length spiked around the turn of the century, around the same period IPOs declined.60

SEC regulation of SPACs provides another example. The SPAC boom in 2020-21 brought many startups into the public markets as independent firms, including some that might otherwise have stayed private or gone for acquisitions. An often-cited reason for startups’ preference for de-SPACs over traditional IPO was the speed and certainty. However, SPACs raised serious investor protection problems, so the SEC promulgated new rules that effectively put an end to the SPAC market, shutting down this speedier path to the public markets for startups. The SEC final rule acknowledged that, by increasing the cost of going public through a de-SPAC transaction, the rule could lead some private companies to consider “a merger with a non-shell company as a more cost-effective alternative” but stated that the agency was “not able to estimate” how many companies this would apply to.61

Some scholars have pointed to the JOBS Act’s “test-the-waters” and confidential filing reforms as examples of how deregulation of the IPO process might lure startups away from acquisitions and back to IPOs. One early study seems to confirm that intuition, finding that the JOBS Act increased IPOs compared to M&A.62 But several more recent studies show that these JOBS Act reforms actually had the opposite effect, increasing startups’ bargaining leverage to negotiate a favorable acquisition.63 The JOBS Act allows issuers pursuing a “dual-track” exit to extract information from prospective IPO investors and the SEC, then leverage that information and the threat of an IPO exit into more favorable acquisition exit.64

Figure 7 illustrates how increased SEC regulatory burden on the go-public process pushes more startups toward staying private and acquisition exits.

Figure 7: Trinary Model

Slowing Reviews of IPO / Cracking Down on SPACs

 

B.    Regulation of Public Companies

Securities regulation can also impact the level of startup acquisitions by making public company status more or less attractive.

The classic contested example is Sarbanes-Oxley, which imposed significant new governance obligations on public companies and is blamed by many in business and politics for the decline of IPOs.65 Some have been skeptical of this claim because the decline in IPOs seems to have started several years before SOX was enacted and because small IPOs did not rebound even when they were subsequently exempted from the most burdensome provisions of SOX.66

Bringing M&A into the picture bolsters the case for a SOX effect. One recent study disaggregates M&A, PE, and regulation as distinct contributing causes to the listing gap and finds that SOX’s impact “happens almost exclusively through mergers” and that mergers’ effect on the listing gap becomes “almost twice as large” after SOX.67 Under Chair Gensler, the SEC itself embraced this study, citing it in a report for the proposition that “M&A and regulatory costs seem to be the largest contributors” to the decline of IPOs.68 An earlier study similarly found that SOX “shifted U.S. private companies’ exit strategy preferences from pursuing an IPO to being acquired by a public firm,” especially for smaller firms.69

C.   Regulation of Private Markets

Securities regulation of private markets also impacts the level of startup acquisitions. The regulation of private secondary sales affects if and how startup founders, VCs, and rank-and-file employees can access liquidity. The deregulation of private capital raising hasn’t yet created a liquid, high-volume market for secondary transactions in startup shares. SecReg effectively restricts resales of private company shares to financial institutions and high net worth individuals and creates incentives for startups to limit secondary transactions.70

Loosening these restrictions could make staying private more attractive for startups, luring some away from potential acquisitions. Some scholars endorse this, urging the SEC to further deregulate private secondary securities markets to “make it more attractive to stay in business as an independent company,” allowing “investors to leave the company without requiring that the company leave the [private] marketplace.”71

The persistence of unicorns’ preference for IPO exits over acquisitions provides some indirect evidence for this hypothesis. While acquisitions have long since overtaken IPOs for startups generally, unicorns continue to prefer IPOs to acquisitions.72 The same deregulation of private markets that enabled these unicorns to grow large while private also seems to enable them to remain independent when they exit.

The SEC endorsed this reasoning in a 2021 rule deregulating private offerings. The SEC explained that the new “flexibility” provided by the rule would enable private startups to “raise enough external financing to develop their business model and scale up to a point where they may become viable candidates for a public offering,” and noted that “[l]arger firms . . . are more likely to achieve a successful IPO exit (as opposed to, for instance, being acquired by a larger competitor).”73

By contrast, if the SEC cracks down on private markets, this will push startups to seek earlier exits and force some to pursue acquisitions. Speaking to Congress two years before her appointment as Director of SEC Corp Fin, Renee Jones embraced this reasoning, calling for new mandatory disclosure requirements on certain private companies in order to “increase pressure for an IPO or sale.”74 At the same hearing, Elisabeth de Fontenay argued against allowing retail investment in private markets, in part on the ground that private startups already had access to sufficient capital from “Large companies . . . flush with capital” who were “highly active in the private-investment space” and whose acquisitions of private firms had already “replaced the IPO as the primary exit for venture capital investments.”75

Figure 8 illustrates how, if the SEC makes it easier for private companies to raise capital or provide liquidity to their investors, this might be expected to pull startups away from both IPOs and acquisitions.

Figure 8: Trinary Model

Private Secondary Market Deregulation

D.   Regulation of Public Company Acquisitions

Securities regulation might also impact the level of startup acquisitions through direct regulation of public company acquisitions, though the direction of the impact is unclear.

The SEC can make acquisitions more or less attractive compared to available alternatives by subsidizing or increasing regulatory hurdles for public company acquirers.76 For instance, the SEC sets and enforces disclosure and proxy rules for public company acquirers. When the SEC dials up the costs to public acquirers, this may make these exits less available and less attractive to startups compared to alternatives.

The SEC embraced this logic in its climate disclosure rule. As proposed, the rule would have required public companies acquiring private targets to include emissions information about the target in S-4 disclosure filings.77 Commentators objected, warning that by raising costs for public acquirers of private targets, “public companies could be placed at competitive disadvantage when bidding to acquire a private target,” making alternative exits more comparatively attractive.78 In the final rule, the SEC accepted these arguments and changed the rule to exempt S-4 filings from climate disclosures in cases involving private targets.79

The SEC can also encourage public company acquisitions. For instance, several studies of SEC staff review of transactional filings like S-4s find that the SEC comment letter process increases the deal completion rate and post-acquisition returns.80 The SEC seems to be devoting some of its resources to subsidize public company acquisitions of private targets, making that exit more comparatively attractive for startups than alternatives like IPOs and staying private.

Figure 9 shows how SecReg could make public acquisitions of private targets more costly, pushing startups towards alternatives:

Figure 9: Trinary Model
SecReg Raises Costs of Acquisitions

Figure 10 shows the reverse: SecReg could encourage startup acquisitions by subsidizing or deregulating them:

Figure 10: Trinary Model
SecReg Subsidizes/Deregulates Acquisitions

IV.  The Acquisition Trend May Be Socially Costly

Many individual acquisitions can be socially valuable. But in the aggregate, it is possible that the increasing number of startups choosing to exit by acquisition may be reshaping our economy for the worse. Fewer independent companies can potentially result in less competition and innovation, fewer opportunities for diversification, and (to the extent that acquisitions replace IPOs) reduced transparency.

A.   Competition and Innovation

Commissioners from both parties emphasize the value of promoting competition and innovation. Commissioner Uyeda emphasized that “private market[s] . . . help further job creation and innovation.”81 He grounded his proposals to “make IPOs attractive again” and expand retail access to private markets in his understanding of the Commission’s “regulatory mandate” to “facilitate the competitiveness and ingenuity of American industry.”82 Then-Chair Jay Clayton likewise defended deregulation of private markets on the grounds that they “substantially contributed to the competitiveness of U.S. firms.”83

Then-Chair Gensler grounded his regulatory philosophy in the idea that “robust competition is critical to the effective functioning of capital markets” and called on the SEC to “remain vigilant to areas where concentration and potential economic rents have built up or may do so in the future.”84 Commissioner Lee noted that the large private “unicorn” companies are “consequential, making significant positive contributions to innovation.”85

If SEC Commissioners are focused on the impacts of securities regulation on competition and innovation—and we think they should be—they should also be concerned about the fact that securities regulation has increasingly pushed startup firms toward acquisitions.

Over time, the more startups that get acquired, the “fewer thriving small public firms that challenge larger firms and eventually succeed in becoming large.”86 As one review of the IPO finance literature explains, the “increasing frequency” with which new small private companies are “being acquired by large, already public companies” means that “a smaller number of companies are controlling an increasing percentage of entrepreneurial activity,” which “raises obvious concerns” for competition.87

The case for concern about the rise of startup acquisitions starts with standard arguments against monopolization. All else equal, when an incumbent firm acquires a startup that would otherwise have competed in one of its product markets, consumers are worse off.88 The incumbent raises its prices. Consumers have fewer products to choose from. And the incumbent faces less pressure to invest in innovation.

There are special reasons to worry that startup acquisitions harm innovation. Venture-backed startups are more likely than other firms to develop innovative technologies.89 And these innovations can threaten incumbents’ business models. The incumbent can respond with a “killer acquisition”—buying a startup with a competing innovation and then shutting down development of its technology. One study finds evidence that pharmaceutical companies do just that—they buy biotech startups developing competing drugs and then discontinue work on those drugs.90

Short of a killer acquisition, startup acquisitions might also harm innovation in more subtle ways. The incumbent might acquire a startup to “coopt” its innovation.91 The startup may have been developing a more fundamental, disruptive innovation—like nuclear fusion. But after an acquisition, the acquirer might redirect the former startup’s engineers and inventions toward more incremental innovations—like a more efficient fission reactor. Independent development may be stifled by a corporate bureaucracy intent on preserving existing revenue streams.

To be sure, many startup acquisitions bolster innovation.92 Some of the recent increase in acquisitions may be an efficient response to changing technology and increasing economies of scope.93 A biotech startup’s drug might be more valuable when matched with the clinical trial expertise of a pharmaceutical company. A word processing software startup’s app might be more useful when integrated into an incumbent firm’s suite of productivity tools. 94

And startup acquisitions may fuel competition among incumbents, even as they foreclose competition between startup and incumbent. For instance, Salesforce acquired Slack to better compete with Microsoft and its communication tool Teams in the enterprise software market.95 A similar dynamic may emerge in the generative AI space, where Big Tech firms are buying or partnering with startups and competing against other Big Tech firms.96

And, of course, the prospect of a lucrative acquisition is a critical piece of what incentivizes the VC universe to invest in startups in the first place.97

But market-driven forces do not provide a complete account for the increase in acquisitions. The research presented in Part III demonstrates that a substantial component of the increasing trend toward acquisitions has been driven not by changes in industrial organization, technology, efficiencies, or other market-driven factors, but rather by regulatory interventions imposed by Congress and the SEC. If not for those regulatory interventions, the evidence suggests, many of the startups that were acquired over the past several decades might have remained independent — whether as public firms or private firms. We suggest that the SEC should be more concerned about the competition-related effects of its own interventions.

B.    Diversification

Another potential cost of acquisitions that is core to the SEC mission is the loss of opportunities for investor diversification. Both Democratic and Republican Commissioners emphasize the importance of providing investors with opportunities for diversification but have different visions for how to do this.

Democratic Commissioners have argued that encouraging companies to go public will let retail investors diversify their portfolios. Commissioner Jaime Lizárraga has said that “retail investors benefit when companies go public” because this “results in a higher supply and greater diversity of companies to choose from when making investment decisions.”98 Congresswoman Maxine Waters, the top Democrat on the House Financial Services Committee, noted that fewer IPOs left “average investors with fewer opportunities to invest in their future and build wealth” and harmed “Main Street investors who invest in IPOs as part of their retirement portfolios or index funds.”99

Republican Commissioners, by contrast, argue that providing retail investors with greater access to private markets will increase opportunities for diversification. Commissioner Uyeda has argued for allowing “investments in private, growth-stage companies that are higher-risk, higher-reward” because such investments “may be beneficial as part of a person’s diversified portfolio.”100 Uyeda similarly argued for allowing retail access to private market investments, which “can offer meaningful diversification” and “more resilient retirement portfolios.”101

The acquisition trend has diminished opportunities for diversification. For example, in the summer of 2025, over one-third of the value of the S&P 500 was just seven firms—Nvidia, Microsoft, Apple, Alphabet, Meta, Amazon, and Tesla.102 If this level of concentration continues, retail investors who put their retirement savings in index funds will have less diverse portfolios than they would have had in previous decades.

One might object that, even though there are fewer firms in the stock market, firms themselves are pursuing more diversified business activities. A bet on a giant tech conglomerate might be less vulnerable to risk that is idiosyncratic to a particular business activity. That might be true, but a large tech firm still has a single point of failure—one CEO, board, and management team responsible for all its decisions. So the retirement plans of tens of millions of Americans are increasingly tied to how a handful of CEOs manage their firms. And these trends won’t be reversed as long as startups continue to accept acquisition offers.

C.   Transparency

Acquisitions can also result in less transparency, another core securities regulation policy value. In fact, the Commissioners’ main worry about the decline of public companies is that it is making markets less transparent.

For instance, Commissioner Lee worried about the rise of unicorns because “despite their outsize impact, there is little public information available about their activities.”103 She explained that “the principal feature of public offerings that puts smaller investors on a relatively equal footing with larger investors and corporate insiders is disclosure—simple access to standardized, accurate, and reliable information,” a feature that she said was lacking in private markets.104 Similarly, Commissioner Crenshaw called for “more transparency” in private markets “to ensure a basic level of disclosure that allows investors, even the most sophisticated, to make informed investment decisions.”105

The shift to acquisitions raises similar concerns to the extent that acquisitions replace IPOs. When a startup gets acquired by a public company, securities regulation gives investors access to only a very limited set of information about the startup’s business, if any.106

Suppose, for example, a startup gets acquired by Microsoft. If the startup is generating revenue, those numbers will be added to the net sales line on Microsoft’s income statement. But it may be impossible to discern the startup’s contribution to Microsoft’s bottom line. Much information about the startup will not be “material” to the acquirer and will not be disclosed at all. A ten million dollar contract might be material for the startup if it were a public, independent company, but not for Microsoft. Similarly, a business risk that would be material for the startup might not be material at all for Microsoft.107

Now imagine this example repeated hundreds of times. The net result is that investors—and society at large—have less transparency into the functioning of the economy.

D.   The Limits of Antitrust

We imagine that some of our readers might share these concerns about the acquisition trend but still think it is outside of the SEC’s jurisdiction. Indeed, some SEC Commissioners have responded to the suggestion that they should care about the rise of acquisitions by deferring to antitrust enforcers. This is a mistake. Antitrust enforcement and securities regulation play different roles in promoting competition.

Antitrust enforcers typically sue to block individual mergers. While the language of antitrust statutes is quite broad, the caselaw interpreting those statutes instructs courts to determine whether a particular merger will harm competition in isolation.108 Enforcers aren’t accustomed to arguing that a particular acquisition will—in combination with many other acquisitions—collectively harm competition.109

Startup acquisitions are also especially hard to challenge.110 Traditional antitrust analysis focuses on how a merger will affect the concentration of one or more product markets. But at the time a startup is acquired, it might have only a modest share in the acquirer’s product market, or it might not have any share in that market because it is operating in an adjacent market. The startup might also not have any share in any market because it simply hasn’t brought its product to market yet, but it might still pose a competitive threat to incumbents.

Antitrust enforcers could try to overcome these hurdles by suing to block large startup acquisitions across the board.111 But this strategy would block a lot of valuable acquisitions, lower venture returns, and diminish funding for the next generation of startups.112

The better approach is for antitrust enforcers to sue to block acquisitions that have a particularly strong likelihood of harming competition and for securities regulators to create conditions in which startups only seek out acquisitions where a combination is particularly synergistic.

V.   SecReg Can Help Reverse The Acquisition Trend

It doesn’t have to be this way. The SEC can and should try to create conditions in which independent businesses can thrive, while upholding its mission to protect investors. We think the SEC should carefully review each of the four areas of securities regulation we analyzed in Part III—the going public process, costs of being a public company, restrictions on trading private company securities, and the regulation of public company acquisitions—to identify changes that would reduce the relative appeal of acquisitions without undermining investor protection.

In fact, creating conditions for independent companies to thrive is not only within the SEC’s legal authority—it is arguably required by it. Congress specifically required the SEC to consider the effects of its rules on “competition.”113 Although Commissioners who’ve addressed this tend to focus on competition in the financial services industries that SEC oversees,114 the commandment applies to all facets of SEC jurisdiction over issuers, investors, and markets. The SEC’s role in regulating competition was recognized by President Biden, whose executive order “Promoting Competition in the American Economy” recognized the SEC as one of the federal agencies charged by law with promoting “conditions of fair competition” including through “oversight of mergers, acquisitions, and joint ventures” and the promoting of “market entry of new competitors.”115

Further, the Administrative Procedure Act prohibits “arbitrary and capricious” agency action, a directive that the Supreme Court has interpreted as imposing a duty on rulemaking agencies to engage in a “reasoned analysis” that considers all “important aspect[s] of the problem.”116 And, in a series of decisions, the D.C. Circuit has construed these two statutory rules as obligating the SEC to conduct a complete analysis of the costs and benefits of rules.117 Any public/private rule the SEC adopts that fails to at least consider impacts on startup acquisitions and competition might be vulnerable to a legal challenge.

In this Part, we sketch two possible reforms. Our goal is not to offer comprehensive proposals, but just to illustrate how the SEC might take seriously the idea of creating conditions for independent companies to thrive.

First, we recommend more high-level policy coordination between SEC and antitrust authorities, particularly at the outset of new administrations. The crackdown on startup acquisitions led by President Biden’s antitrust regulators created a unique opportunity to draw more of these firms into the public markets as independent companies. But, notwithstanding the executive order on a government-wide approach to competition, President Biden’s SEC did not appear to recognize this opportunity, much less capitalize on it, and instead pursued its own aggressive regulatory reform agenda in the name of investor protection. Exit-seeking startups in the Biden era confronted heightened regulatory challenges on both acquisition and IPO tracks, and many opted to pursue alternatives like secondary private sales, reverse acquihires, and other strategies designed to minimize both antitrust and SecReg scrutiny.118

We speculate that this dissonance between the Biden era FTC/DOJ and Biden era SEC was not a deliberate choice, but rather the accidental result of siloed policymaking. Instead of a unified approach balancing competing interests and goals, SecReg policymakers were allowed to pursue their agendas in isolation, ignoring the effects on acquisitions and competition. Better coordination seems like an essential reform here.

Second, more specifically, we recommend that the SEC rethink the IPO process itself to make that process faster and more determinate for startups. Startup founders and VCs often face significant liquidity pressure.119 Compared to IPOs, acquisitions may represent a comparably attractive exit strategy for these startups simply because they are much faster.120 Empirical studies confirm that VC-backed startups facing liquidity pressure are more likely to sell out.121 

The SEC could mitigate this effect by taking steps to speed up the IPO process. The staff review and comment process adds an average of five months to the IPO timeline.122 As one of us has argued, this process was an important form of investor protection back in the 1930s, but today the delays and other costs injected by this process seem to far exceed any benefits to investors.123 Calls to rein in staff review have been proliferating among influential groups close to the SEC in recent months.124

IPO activity during the 2025 government shutdown may have shifted the Overton window in favor of this reform. Ordinarily, IPO filers complete the lengthy staff review process, seek and obtain staff “acceleration” of effectiveness within a day or two of their chosen effective date, and then price the offering and move forward with the sales and listing. During the shutdown, however, this was not possible because most SEC staff were furloughed and so unavailable to review IPO filings, declare the review complete, or grant requests for acceleration. As a result, the shutdown threatened to freeze the IPO market, just as it was finally heating up.125

To keep the IPO market running, SEC officials, elite lawyers, stock exchanges, and other players came together to find a way to allow firms to go forward with IPOs without waiting for the staff review and comment process to come back online. The legal foundation was the Securities Act itself, which has always authorized firms to go effective automatically 20 days after filing a registration statement.126 While that process had been a dead letter for decades, with virtually all IPO firms going through the staff review and acceleration process,127 the extraordinary circumstances of the shutdown led to a revitalization of the 20-day rule.

The SEC took additional steps to ease the pain associated with this method by permitting firms to omit a definitive price from their registration statements and wait to price the offering closer to the actual sale—flexibility that is ordinarily available only to firms who go through the entire staff review process.128 Exchanges also indicated openness to listing firms who followed this 20-day method.129 Leading law firms lauded the SEC’s guidance and encouraged clients to consider the 20-day option.130 SEC Chair Paul Atkins publicly encouraged firms to use this method and announced that “the IPO market is still open for business.”131

Table 1 below collects preliminary information regarding the first seven firms that used the 20-day method to complete an IPO during the shutdown:

Table 1: Shutdown IPOs

Firm	Price Range	IPO Price	Day 1 Close	Amount Raised (millions)132	IPO Date	Exchange	Underwriters133	Law Firm	Auditor
MapLight	N/A134	$17	$18.34	$296.30	10/26	Nasdaq	Morgan Stanley, Jefferies, Leerink Partners, Stifel	Cooley	RSM
Beta Technologies	$27-33	$34	$36	$1,015	11/3	NYSE	Morgan Stanley, Goldman Sachs	Kirkland & Ellis	Deloitte & Touche
Navan	$24-26	$25	$20	$923	10/29	Nasdaq	Goldman Sachs & Citigroup	Cooley	PwC
Evommune	$15-17	$16	$20.23	$150	11/5	NYSE	Morgan Stanley, Leerink Partners, Evercore ISI, and Cantor	Cooley	BDO
BillionToOne	$49-55	$60	$100	$273	11/5	Nasdaq	J.P. Morgan, Piper Sandler, Jefferies and William Blair	Gunderson	PwC
Grupo Aeromexico (ADS)	$18-20	$19	$20.35	$222.8	11/5	NYSE	Barclays, Morgan Stanley, J.P. Morgan, Evercore ISI	White & Case	KPMG
Exzeo Group	$20-22	$21	$21.01	$168	11/4	NYSE	Truist Securities, Citizens Capital Markets, William Blair	Foley & Lardner	Forvis Mazars

 

These IPOs raised over $3 billion. Five enjoyed a “pop” (closing first day trading above the IPO price), another closed the first day at the same price, and only one closed below. 135 Two priced above the initial range and four others priced at the midpoint (the last one did not provide a range). These deals were underwritten top-shelf investment banks, advised by elite law firms, and ended with significant companies listed on national stock exchanges and subject to the public company regulatory regime.

And, critically, these firms did all this without going through the complete SEC staff review and acceleration process. For the IPO community, this suggests that rethinking government’s role in the IPO process turns out to be more feasible than previously assumed.

The SEC may consider making its shutdown guidance permanent.136 All IPO firms would then have the flexibility to defer pricing their offering until immediately prior to sale regardless of whether they go effective via the staff review and acceleration or via the 20-day rule that Congress originally intended for them to use. This would allow IPO firms (in consultation with their advisors, their investors, and the exchanges) to balance the benefit of further staff review against the costs of further delay. For instance, some IPO firms could elect to make amendments after receiving the first staff comment letter and then start their 20-day clock, rather than waiting to go through an additional three to four rounds of back-and-forth.137

To “make IPOs great again,” the SEC must confront the reality that acquisitions have become the primary competitor for IPOs and must design reforms with this in mind. We believe reforms like those proposed above, which would make the IPO process faster and more certain, are promising because they would eliminate a critical advantage that acquisitions have over IPOs. The failure of the JOBS Act’s IPO process reforms (test-the-waters and confidential filing) to attract more listings stems from the fact that these reforms were designed to lure startups away from private markets but failed to consider that these reforms would tend to amplify the attractiveness of acquisitions over IPOs.

Conclusion

Securities regulation has helped fuel the decline of public listings by making acquisitions more attractive as compared to staying private or going public.

The policies in question are designed to promote an important goal—protecting investors. But many securities policymakers don’t acknowledge any tradeoff is being made. Notwithstanding the ample empirical evidence establishing a link between securities regulation, acquisitions, and the decline of public listings, policymakers considering changes to the public/private line generally ignore acquisitions. We don’t know how the tradeoff should be resolved, but we think it should not be ignored.

• Infra Part I.B.
• Infra Part I.A.
• Infra Part I.C.
• Infra Part II.
• Id.
• Caroline A. Crenshaw, Comm’r, U.S. Sec. & Exch. Comm’n, The Autobahn and Private Markets Remarks at Better Markets Academic Advisory Board Annual Conference (Sept. 19, 2025).
• Infra Part III.
• Infra Part IV.A.
• Infra Part IV.B.
• Infra Part IV.C.
• Infra Part V.
• Gabriele Lattanzio et al., Dissecting the Listing Gap: Mergers, Private Equity, or Regulation?, 65 J. Fin. Mkts. 100836 (2023) (finding evidence that S-Ox increased startup’s preference for acquisitions over IPOs); Kevin Boeh & Craig Dunbar, Raising Capital After IPO Withdrawal, 69 J. Corp. Fin. 102020 (2021) (firms who file and then withdraw from an IPO are more likely to engage in post-withdrawal M&A under the JOBS Act); Yongqiang Chu et al., The JOBS Act and Mergers and Acquisitions, 72 J. Corp. Fin. 102153 (2022) (finding that private acquisition targets are valued higher under the JOBS Act); Jitendra Aswani et al., The Impact of JOBS Act on M&As (Jan. 14, 2020) (unpublished manuscript) (on file with SSRN) (same); Michele Dathan & Yan Xiong, Too Much (Early) Information? The Option to Test the Waters Before Going Public (May 9, 2025) (unpublished manuscript) (on file with SSRN); see also Alexander I. Platt, Dual-Track Bias, Wash. U. L. Rev. (forthcoming 2026)(on file with the University of Chicago Business Law Review) (showing how the JOBS Act IPO process reforms encouraged startups to pursue “dual-track” exits, leveraging the IPO process to extract a better acquisition exit); Craig Doidge et al., Are There Too Few Publicly Listed Firms in the US?, 60 Fin. Rev. 317 (2025) (suggesting that SecReg’s “distinction between public and private” may play a role in the “increase in firm size on public markets”).
• Caroline A. Crenshaw, Comm’r, U.S. Sec. & Exch. Comm’n, Remarks at the September 18th Investor Advisory Committee Meeting (Sept. 18, 2025) (“I have deep reverence for the public-private markets divide that is one of the hallmarks of our regulatory landscape.”).
• Financial journalists, advocacy groups, and others engaged in the debate over the decline of public markets often follow the same binary model.
• Allison H. Lee, Comm’r, U.S. Sec. & Exch. Comm’n, Investing in the Public Option: Promoting Growth in Our Public Markets: Remarks at The SEC Speaks in 2020 (Oct. 8, 2020).
• Allison H. Lee, Comm’r, U.S. Sec. & Exch. Comm’n, Going Dark: The Growth of Private Equity Markets and the Impact on Investors and the Economy: Remarks at The SEC Speaks in 2021 (Oct. 12, 2021).
• Caroline A. Crenshaw, Comm’r, U.S. Sec. & Exch. Comm’n, Big “Issues” in the Small Business Safe Harbor: Remarks at the 50th Annual Securities Regulation Institute (Jan. 30, 2023).
• Crenshaw, supra note 6.
• Elisabeth de Fontenay, The Deregulation of Private Capital and the Decline of the Public Company, 68 Hastings L.J. 445 (2017).
• Michael Ewens & Joan Farre-Mensa, The Deregulation of the Private Equity Markets and the Decline in IPOs, 33 Rev. Fin. Stud. 5463 (2020).
• Jay Clayton, Comm’r, U.S. Sec. & Exch. Comm’n, Remarks to the Economic Club of New York (Sept. 9, 2020).
• Hester Peirce, Comm’r, U.S. Sec. & Exch. Comm’n, Angels and IPOs: Remarks Before the Small Business Capital Formation Advisory Committee (Feb. 27, 2024).
• Hester Peirce, Comm’r, U.S. Sec. & Exch. Comm’n, A Creative and Cooperative Balancing Act: Remarks Before the SEC 31st International Institute for Securities Market Growth and Development (May 8, 2025).
• Hester Peirce, Comm’r, U.S. Sec. & Exch. Comm’n, Hurdles: Remarks Before the Small Business Capital Formation Advisory Committee (Feb. 25, 2025).
• Paul S. Atkins, Chair, U.S. Sec. & Exch. Comm’n, Open Meeting Statement on Policy Statement Concerning Mandatory Arbitration and Amendments to Rule 431 of the Commission’s Rules of Practice (Sept. 17, 2025).
• Paul S. Atkins, Chair, U.S. Sec. & Exch. Comm’n, Keynote Address at the John L. Weinberg Center for Corporate Governance’s 25th Anniversary Gala (Oct. 9, 2025).
• See Kevin Boeh & Craig Dunbar, IPO Regulators Gone Wild, in The Oxford Handbook on IPOs 52 (Douglas Cumming & Sofia A. Johan eds. 2018).
• See, e.g., Lattanzio et al., supra note 12; Francesco Bova et al., The Sarbanes-Oxley Act and Exit Strategies of Private Firms, 31 Contemp. Acct. Rsch. 818 (2014).
• See, e.g.,Xiaohui Gao et al., Where Have All the IPOs Gone?, 48 J. Fin. & Quantitative Analysis 1663 (2013); John Coates & Suraj Srinivasan, SOX After Ten Years: A Multidisciplinary Review, 28 Acct. Horizons 627 (2014); Craig Doidge et al., The U.S. Listing Gap, 123 J. Fin. Econ. 464 (2017).
• Regulatory debates over SPACs also seem to reflect an artificially narrow model that excludes most of the real alternatives available to startups. Those discussions compare SPACs to the traditional IPO. For Democratic Commissioners, SPACs are disfavored because they offer weaker investor protections than IPOs and thus, like private markets, will steal business away from traditional IPOs and harm investors. See, e.g., Gary Gensler, Chair, Sec. & Exch. Comm’n, Statement on Final Rules Regarding Special Purpose Acquisition Companies (SPACs), Shell Companies, and Projections (Jan. 24, 2024), https://perma.cc/ZB7F-MBAQ. For Republican Commissioners, the issue is that traditional IPOs have become too costly and cumbersome, so they want to encourage these alternative cheaper pathways to the public markets. Id. Either way, SPACs are understood only within the binary universe of IPO or SPAC, and all other exit strategies available to private firms are left outside the model.
• We use “founders” as a shorthand for startup executives, some of whom aren’t founders.
• Brian J. Broughman et al., No Exit, 100 N.Y.U. L. Rev. 1481, 1491 (2025).
• Id.
• Id. at 1493 fig. 1.
• Id. at 1497 fig. 4.
• B. Espen Eckbo & Markus Lithell, Merger-Driven Listing Dynamics, 60 J. Fin. & Quantitative Analysis 209 (2025).
• Lattanzio et al., supra note 12.
• Mark J. Roe & Charles C. Y. Wang, Half the Firms, Double the Profits: Public Firms’ Transformation, 1996-2022 (Euro. Corp. Gov. Inst., Working Paper No. 771, 2024).
• Broughman et al., supra note 32, at 1511 fig. 6.
• Id. at 1521-26.
• Id. at 1497 fig. 4.
• 2021 was a historically strong year for IPOs, but other recent years have been underwhelming. See id. at 1496 fig. 3.
• See id. at 1539-42.
• Cade Metz & Karen Weise, Microsoft to Invest $10 Billion in OpenAI, the Creator of ChatGPT, N.Y. Times (Jan. 23, 2023), https://perma.cc/YKT2-6UYN.
• OpenAI and NVIDIA Announce Strategic Partnership to Deploy 10 Gigawatts of NVIDIA Systems, OpenAI (Sept. 22, 2025), https://openai.com/index/openai-nvidia-systems-partnership/.
• Berber Jin et al., OpenAI Plans Fourth-Quarter IPO in Race to Beat Anthropic to Market, Wall St. J. (Jan. 29, 2026).
• George Hammon et al., Google Invests Further $1bn in OpenAI Rival Anthropic, Fin. Times (Jan. 22, 2025), https://www.ft.com/content/ed631513-dd37-44a3-a536-b2002f5727cc?syn-25a6b1a6=1.
• Broughman et al., supra note 32, at 1539-42.
• Alex Heath, This is Big Tech’s Playbook for Swallowing the AI Industry, Verge (July 1, 2024), perma.cc/7BLE-C69T.
• SeeBroughman et al., supra note 32, at 1543-46.
• Antitrust scrutiny of these transactions may be ramping up. See, e.g., Susan A. Musser et al., FTC Eyeing Acquihire Transactions in Tech Industry, WilmerHale(Jan. 30, 2026), https://perma.cc/M3KE-6JRR; Jonathan Vanian, Sen. Warren, others urge FTC, DOJ to scrutinize tech AI ‘acqui-hiring’ deals for antitrust violations, CNBC (Feb. 4, 2026), https://perma.cc/33JC-473Q.
• See, e.g., Atkins, supra note 25; Crenshaw, supra note 6; Peirce, supra note 22; Robert J. Jackson Jr., Comm’r, U.S. Sec. & Exch. Comm’n, The Middle-Market IPO Tax (Apr. 25, 2018).
• Crenshaw, supra note 6.
• Lee, supra note 15.
• Mark T. Uyeda, Comm’r, U.S. Sec. & Exch. Comm’n, Remarks at the Florida Bar’s 41st Annual Federal Securities Institute and M&A Conference (Feb. 24, 2025).
• Gao et al., supra note 29.
• Some other important (somewhat overlapping) explanations for the rise of acquisitions and decline of public markets include changing mutual fund investment preferences, globalization, anticompetitive behavior by incumbents, and weakened antitrust enforcement. See e.g., Robert Bartlett et al., The Small IPO and the Investing Preferences of Mutual Funds, 47 J. Corp. Fin. 151 (2017) (changing mutual fund investment preferences); M. Vahid Irani et al., Globalization and Capital Markets: Evidence from the Decline in IPOs (Oct. 2025) (unpublished manuscript) (on file with SSRN) (globalization); Colleen Cunningham et al., Killer Acquisitions, 129 J. Pol. Econ. 649 (2021) (anticompetitive behavior by incumbents); Mark A. Lemley & Matthew T. Wansley, Coopting Disruption, 105 Bos. Univ. L. Rev. 457 (2025); Robert Loveland & Kevin Okoeguale, Antitrust Deregulation and the U.S. Listing Gap, 80 Fin. Rsch. Letters 107425 (2025) (weakened antitrust enforcement).
• Alperen Gözlügöl et al., The Oscillating Domains of Public and Private Markets, (Ctr. for Advanced Studs. on the Founds. of L. & Fin., Working Paper No. 52, 2023).
• Platt, supra note 12; see infra Part V.
• Platt, supra note 12.
• Special Purpose Acquisition Companies, Shell Companies, and Projections, 89 Fed. Reg. 14296 (Feb. 26, 2024).
• Michael Dambra et al., The JOBS Act and IPO Volume: Evidence that Disclosure Costs Affect the IPO Decision, 116 J. Fin. Econ. 121 (2015).
• Boeh & Dunbar, supra note 12; Chu et al., supra note 12; Aswani et al., supra note 12; see also Platt, supra note 12 (explaining how the JOBS Act’s confidential filing reform enables startups to pursue a dual-track strategy, where they leverage an IPO filing to extract a higher price on the acquisition market).
• See Platt, supra note 12.
• See, e.g., IPO Task Force, Rebuilding the IPO On-Ramp 8-12 (Oct. 20, 2011); U.S. Chamber of Commerce, Unlocking America’s Capital Markets: Fueling Economic Growth and Innovation 7 (June 3, 2025); Andrew Ramonas, Ex-SEC Commissioner Atkins Blames IPO Dearth on Regulations, Bloomberg Law (June 12, 2017), https://news.bloomberglaw.com/business-and-practice/ex-sec-commissioner-atkins-blames-ipo-dearth-on-regulations; Press Release, House Committee on Financial Services, Capital Markets Subcommittee Reexamines the Sarbanes-Oxley Act (June 25, 2025) (on file with author).
• Gao et al., supra note 29.
• Lattanzio et al., supra note 12.
• Office of the Advocate for Small Business Capital Formation, U.S. Sec. & Exch. Comm’n, Annual Report: Fiscal Year 2024 (2024).
• Bova et al., supra note 28.
• See Elizabeth Pollman, Information Issues on Wall Street 2.0, 161 U. Pa. L. Rev. 179, 187-93 (2012).
• Mark Lemley & Andrew McCreary, Exit Strategy, 101 B.U. L. Rev. 1, 72–100 (2021).
• Daria Davydova et al., The Unicorn Puzzle (Nat’l Bureau of Econ. Rsch., Working Paper No. 30604, 2022); Keith Brown & Kenneth Wiles, The Growing Blessing of Unicorns: The Changing Nature of the Market for Privately Funded Companies, 32 J. Applied Corp. Fin. 52 (2020); Abraham Cable, Time Enough for Counting: A Unicorn Perspective, 39 Yale J. Reg. Bull. 23 (2021); Adrienna Huffman, Abe Cable, Shuyi Deng & Monet Lee, UC Hastings L. & The Brattle Grp., The Unicorn Initiative – Exits (2022).
• Facilitating Capital Formation and Expanding Investment Opportunity by Improving Access to Capital in Private Markets, 86 Fed. Reg. 3552 (Jan. 14, 2021).
• Examining Private Exemptions as a Barrier to IPOs and Retail Investment: Before the House Financial Services Committee Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets, 116th Cong. 13 (2019) (written testimony of Renee M. Jones) (emphasis added).
• Id. at 14 (written testimony of Elisabeth de Fontenay).
• See Usha Rodrigues & Mike Stegemoller, An Inconsistency in SEC Disclosure Requirements? The Case of the “Insignificant” Private Target, 13 J. Corp. Fin. 251 (2007).
• The Enhancement and Standardization of Climate-Related Disclosures for Investors, 87 Fed. Reg. 21472 (Apr. 11, 2022).
• The Enhancement and Standardization of Climate-Related Disclosures for Investors, 89 Fed. Reg. 21821 (Mar. 28, 2024).
• Id.
• Tingting Liu et al., The Role of External Regulators in Mergers and Acquisitions: Evidence from SEC Comment Letters, 29 Rev. Acct. Stud. 451 (2024); Bret A. Johnson et al., SEC Comment Letters on Form S-4 and M&A Accounting Quality, 28 Rev. Acct. Stud. 862 (2023).

• Mark T. Uyeda, Comm’r, U.S. Sec. & Exch. Comm’n, SIFMA’s Private Markets Valuation Roundtable (Sept. 4, 2025).
• Id.
• Clayton, supra note 21.
• Gary Gensler, Chair, U.S. Sec. & Exch. Comm’n, Capital Markets, Competition, and the SEC (Dec. 5, 2024).
• Lee, supra note 16.
• Kathleen Kahle & René Stulz, Is the US Public Corporation in Trouble?, 31 J. Econ. Persp. 67 (2017).
• Michelle Lowry et al., Initial Public Offerings: A Synthesis of the Literature and Directions for Future Research, 11 Founds. & Trends Fin. 154 (2017).
• Giulio Federico et al., Antitrust and Innovation: Welcoming and Protecting Disruption, in Innovation Policy and the Economy, Volume 20 125 (Josh Lerner & Scott Stern eds., 2020).
• Sabrina T. Howell et al., How Resilient is Venture-Backed Innovation? Evidence from Four Decades of U.S. Patenting (Nat’l Bureau of Econ. Rsch., Working Paper No. 27150, 2020).
• Colleen Cunningham et al., Killer Acquisitions, 129 J. Pol. Econ. 649 (2021).
• Lemley & Wansley, supra note 57.
• See generally Oliver Williamson, Markets and Hierarchies: Analysis and Antitrust Implications (1975).
• Gao et al., supra note 29; see, e.g., Yangyang Cheng et al., Rethinking the Traditional M&A Motivations within the Platform Acquisitions Context, in Digital Platforms Handbook (2025).
• See Jonathan M. Barnett, “Killer Acquisitions” Reexamined: Economic Hyperbole in the Age of Populist Antitrust, 3 U. Chi. Bus. L. Rev. 39, 78-83 (2024); see, e.g., Mahka Moeen & Will Mitchell, How do Pre-Entrants to the Industry Incubation Stage Choose Between Alliances and Acquisitions for Technical Capabilities and Specialized Complementary Assets?, 41 Strategic Mgmt. 1450 (2020).
• Erin Griffith & Lauren Hirsch, Salesforce to Acquire Slack for $27.7 Billion, N.Y. Times (Dec. 1, 2021), https://www.nytimes.com/2020/12/01/technology/salesforce-slack-deal.html.
• See id.
• See, e.g., Gordon M. Phillips & Alexei Zhdanov, Venture Capital Investments, Merger Activity, and Competition Laws Around the World, 13 Rev. Corp. Fin. Stud. 303 (2024).
• Jaime Lizarraga, Comm’r, U.S. Sec. & Exch. Comm’n, Remarks at the 43rd Annual Small Business Forum. Catching up with Small Caps: Lessons Learned from Going Public and Staying Public (Apr. 18, 2025).
• Press Release, U.S. House Committee on Financial Services: Democrats, DAY 9 OF THE TRUMP-REPUBLICAN SHUTDOWN: How is the Trump-Republican Shutdown Further Slowing Down the Economy and Preventing Businesses from Going Public? (Oct. 9, 2025) (on file with author).
• Mark T. Uyeda, Comm’r, U.S. Sec. & Exch. Comm’n, 2025 Conference on Financial Market Regulation (May 15, 2025).
• Uyeda, supra note 81.
• Lewis Krauskopf, US Stock Market Concentration Risks Come to Fore as Megacaps Report Earnings, Reuters (July 23, 2025, 10:07 AM), https://www.reuters.com/business/autos-transportation/us-stock-market-concentration-risks-come-fore-megacaps-report-earnings-2025-07-23/.
• Lee, supra note 16.
• Lee, supra note 15.
• Crenshaw, supra note 17.
• George Georgiev, Too Big to Disclose: Firm Size and Materiality Blindspots in Securities Regulation, 64 UCLA L. Rev. 602 (2017).
• Id.
• See Robin C. Feldman & Mark A. Lemley, Atomistic Antitrust, 63 Wm. & Mary L. Rev. 1869, 1876-92 (2022).
• See id. at 1892-1922.
• For an analysis of how enforcers can challenge acquisitions of potential competitors under existing law, see C. Scott Hemphill & Tim Wu, Nascent Competitors, 168 U. Pa. L. Rev. 1879, 1893-1901 (2020).
• Some critics suggest that the Biden administration came close to this. See, e.g., Jeffrey Sonnenfeld & Steven Tian, Competition Cop Lina Khan’s Antitrust Overreach Is Hurting U.S. Competitiveness–and Destroying Billions of Dollars in Value, Fortune (Dec. 7, 2023, 7:21 AM), https://fortune.com/2023/12/07/lina-khan-antitrust-overreach-ihurting-us-competitiveness-destroying-billions-value-sonnenfeld-tian/.
• Robert Bartlett & Paolo Ramella, Policing Cooptive Acquisitions While Preserving the Venture Capital Ecosystem, 105 Bos. Univ. L. Rev. 535 (2025); Devin Reilly et al., The Importance of Exit Via Acquisition to Venture Capital, Entrepreneurship, and Innovation, 32 Minn. J. Int’l L. 159 (2022).
• Securities Exchange Act of 1934 § 3(f) (2012); Securities Act § 2(b) (2012).
• Robert J. Jackson Jr., Comm’r, U.S. SEC Comm’n, Competition: The Forgotten Fourth Pillar of the SEC’s Mission (Oct. 11, 2018); Gensler, supra note 84.
• Exec. Order No. 14036, 86 Fed. Reg. 132 (July 9, 2021).
• See Motor Vehicle Mfrs. Ass’n U.S. v. State Farm, 463 U.S. 29 (1983).
• See, e.g., Bus. Roundtable v. SEC, 647 F.3d 1144 (D.C. Cir. 2011).
• Broughman et al., supra note 32.
• Brian J. Broughman & Matthew T. Wansley, Risk-Seeking Governance, 76 Vand. L. Rev. 1299, 1319 (2023); Morgan Stanley, Liquidity Trends 7 (2025) (survey of 150 leaders at VC-backed private companies, finding that four out of five report “feeling pressure to facilitate a liquidity event” and noting that “investors and employee owners are typically the source of this pressure”).
• See, e.g., Bloomberg L. Prac. Guidance, Private Funds, Overview - IPO Exit (Pre-Transaction Considerations), Bloomberg Law, https://perma.cc/UHX9-SC7E (“[T]he IPO process can take several months . . . . If the fund sponsor requires a quick exit from the company, an M&A transaction, which typically takes less time, may be a better option.”).
• Ting Yao & Hugh O’Neil, Venture Capital Exit Pressure and Venture Exit: A Board Perspective, 43 Strategic Mgmt. J. 2829 (2022); Bo Bian et al., Conflicting Fiduciary Duties and Fire Sales of VC-Backed Startups, (Goethe Univ. Frankfurt am Main, LawFin Working Paper No. 35, 2025), available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4139724; Ronald W. Masulis & Rajarishi Nahata, Venture Capital Conflicts of Interest: Evidence from Acquisitions of Venture-Backed Firms, 46 J. Fin. & Quant. Analysis 396 (2011); see also Anup Basnet & Thomas Walker, Acquisitions of VC-Backed Firms, in Palgrave Encyclopedia of Private Equity (2025).
• Alex Platt, Rethinking the IPO Bureaucracy, 22 Berkeley Bus. L. J. 344 (2025).
• Id;. See also Alex Platt, The Administrative Origins of Mandatory Disclosure, 49 J. Corp. L. 1143 (2024).
• U.S. Chamber of Commerce, Unlocking America’s Capital Markets: Fueling Economic Growth and Innovation (2025), https://www.uschamber.com/finance/preserving-and-promoting-the-public-company-ecosystem (warning that the uncertainty and delay added by SEC IPO review pushes firms away from IPOs and urging the SEC to “at minimum seek to shorten the amount of time the review process takes”); U.S. Sec. & Exch. Comm’n, Sec. & Exch. Roundtable: Reexamining the IPO On-Ramp 14 (2025), https://www.sec.gov/files/ipo-roundtable-transcript.pdf (expert practitioners invited to SEC roundtable complaining that SEC IPO review had become “unpredictable in terms of timing” and calling on the SEC to “streamline” this process); Investors Choice Advocacy Network, SEC 2025 Action Plan at 3 (noting that the staff “currently has unlimited discretion to delay the effectiveness of company filings,” which creates “uncertainty and potentially significant costs for companies seeking to access public markets,” and proposing to “[m]andate timelines for the review and comment process” and “[i]mplement automatic effectiveness at timeline expiration for filings requiring staff approval”).
• See, e.g., Bailey Lipshultz, IPOs in Limbo as Shutdown Threatens Billions of Dollars of Deals, Bloomberg (Oct. 6, 2025).
• Securities Act Section 8(a); see also Paul Atkins (@SECPaulSAtkins), With yesterday’s listing of MapLight (Oct. 28, 2025, 4:46 PM), X, https://x.com/SECPaulSAtkins/status/1983289354815713289 (describing this as the “method Congress originally intended”).
• Platt, supra note 122.
• SEC, Updated Division of Corporation Finance Actions in Advance of a Potential Government Shutdown (Oct. 9, 2025) (“[W]e will not recommend enforcement action to the Commission if a company omits the information specified in Rule 430A from the form of prospectus filed as part of a registration statement during the shutdown and such registration statement goes effective, either during or after the shutdown, by operation of law pursuant to Section 8(a) of the Securities Act.”).
• NASDAQ, Impact of Government Shutdown: Frequently Asked Questions (Oct. 1, 2025).
• See, e.g., Bermeo et al., IPOs and Other Public Offerings During the Government Shutdown, Davis Polk (Oct. 27, 2025), https://perma.cc/KE7U-NS9R; Cooley, Lighting the Way: MapLight’s Historic IPO Amid a Government Shutdown (Oct. 29, 2025), https://perma.cc/8DAL-ZSMP; Cooley, Rerouted But Not Delayed: How Navan’s IPO Stayed the Course (Nov. 5, 2025), https://perma.cc/VJ7X-3F4V; Erik Gerding et al., SEC Moves to Ease IPOs and Other Registered Offerings During Shutdown, Freshfields (Oct. 9, 2025), https://perma.cc/3G76-M98B; Areno et al., New SEC Guidance Allows Companies to Proceed with IPOs During Government Shutdown, Skadden (Oct. 10, 2025), https://perma.cc/5X42-8YS5. Some firms are aggressively marketing their capacity to guide IPOs using this channel. Cooley, Navigating Uncertainty – Historic IPOs During the US Government Shutdown (Nov. 5, 2025), https://perma.cc/FPS2-24Z2.
• Atkins, supra note 126.
• Gross amount, before commissions fees, and expenses.
• Joint Lead Book-Running Managers.
• MapLight set its firm IPO price in its registration statement, triggering the 20-day method, before SEC issued guidance authorizing IPO firms to defer final pricing until closer to the offering.
• IPOs are quite volatile even under ordinary circumstances. Michelle Lowry et al., The Variability of IPO Returns, 65 J. Fin. 425 (2010); U.S. Sec. & Exch. Comm’n, Investor Bulletin, Investing in an IPO 5 (“[I]t is not uncommon for the closing price of the shares shortly after the IPO to be well above or below the offering price.”); see also Platt, supra note 122.
• The SEC may be able to accomplish this by striking the words “is declared” from Rule 430A and replacing it with “becomes,” through notice-and-comment rulemaking. Notably, following the shutdown, the SEC announced that it is abandoning the related practice of issuing individuated guidance in response to requests for “no-action” letters from companies looking to exclude shareholder proposals, explaining that this was due to (among other things) “current resource and timing considerations” and “the extensive body of guidance from the Commission and staff” on the topic—both of which are equally applicable to registration statements. See U.S. Sec. & Exch. Comm’n, Statement Regarding the Division of Corporation Finance’s Role in the Exchange Act Rule 14a-8 Process for the Current Proxy Season (Nov. 17, 2025), https://www.sec.gov/newsroom/speeches-statements/statement-regarding-division-corporation-finances-role-exchange-act-rule-14a-8-process-current-proxy-season.
• For a longer discussion of the justifications behind this type of reform see Platt, supra note 122.