Jarod Allerheiligen, managing partner of the Minneapolis office of Grant Thornton, commends a U.S. House bill expected to clear the Financial Services Committee with bipartisan support this year that's designed to make way for small, fast-growing public companies.
"Small initial public offerings have virtually disappeared," Allerheiligen noted. "From 1991 to 1997, about 80 percent of IPOs raised less than $50 million. Last year, a mere 16 percent of IPOs in the United States were of that size. While the increased costs of complying with the Sarbanes-Oxley Act [of 2002] are frequently cited, the true causes lie in the numerous regulatory changes ... intended to increase transparency [that] instead ruined the underlying structure of the market. The reality is that entrepreneurs no longer have as vibrant of an IPO market ...."
Among Minnesota's largest 100 public companies, many went public by initially raising less than $50 million, including Stratasys, SPS Commerce, American Medical Systems and Buffalo Wild Wings.
Rep. Erik Paulsen of Eden Prairie is a co-sponsor, with other Republicans and Democrats, of the Small Capital Formation Act of 2011. The bill would amend a key regulation in the Securities Act of 1933 that, essentially, would increase from $5 million to $50 million the amount that a small company could raise using a simpler, cheaper "offering circular" for review by the Securities and Exchange Commission. It opens up the so-called Regulation A exemption to a size that will allow companies to list on the NYSE and Nasdaq and to avail themselves of the "Blue Sky" exemption, avoiding costly state-by-state filings. It also allows issuers to gauge the viability of an offering by meeting with investors before incurring the significant costs of underwriting an offering.
Grant Thornton has been lobbying in favor of the bill.
TELECOMMUTING PAYS OFF
Telecommuting pays off for private employers and the public, according to a study by the University of Minnesota's Humphrey School of Public Affairs. A state-sponsored program for metro-area employers -- eWorkPlace Minnesota -- delivered $9 in benefits for every $1 spent, the study found.
The state Transportation Department spent $3.2 million of about $133 million in federal highway money it won in late 2008 to establish a telecommuting initiative that helps companies offer employees the option of working from home or establish flexible work schedules to avoid rush hours.
"Telework ... solves a lot of different kinds of business, community and individual problems with one relatively inexpensive tool," said Adeel Lari of the Humphrey School. Lari said the state's $3.2 million investment will yield nearly $30 million over the next five years. And that doesn't count benefits such as productivity, environmental and quality of life gains.
