Because of this legislation, going public is much more expensive, complex, and time-consuming than it was before. This has the unintended(?) consequence of keeping small business small by limiting its access to the public markets. Big business and government take up the slack, with long-term implications for our economy and our culture, none of them good. Small business is far more likely to operate domestically, with much higher domestic employment/$ of invested capital.

Hole-diggers unite for better opportunity! Resuscitate small biz by reducing the bias toward the big.

Right now it's probably more lack of risk appetite and uncertainty about coming losses (CRE defaults being one of the bigger single items) at the I-banks and big institutional players that's the big obstacle for IPO's.

While the compliance costs of SarbOx are outsized (especially if the analysts who said that none of the late 90's/early00's collapses and scandals would have been prevented had the law been in place at the time), I'm not sure that they're at the level that'd be significant on the scale of cash raised by most IPO's; the per-company cost apperas to be on the scale of tens or hundreds of thousands while even small IPO's would be looking to raise money at least in the tens of millions (I realize much of that is already spoken for by initial private investors/VCs, but it's still a drop in the bucket).

Virtually no really small businesses (let's say 30 or fewer employees and under $5Mil annual cash flow) would be looking to go public at that stage as opposed to seeing private capital or loans to fund expansion, and even fewer would likely be in a position to utilize the scale of cash infusion that an IPO would be expected to provide. For bigger firms which are already big enough to take that step, SarbOx compliance would seem to be a fraction of the legal/procedural costs involved.

They're much smaller than what I've seen, although I don't have recent data.

It's also important to remember that IPO availability affects businesses that are not ready at the moment. Earlier stage investors want the prospect of going public as one more bit of upside. Raising the IPO bar with regulations and other discouragements lowers the odds that they will open their checkbooks.

Couldn't remember the source or exact values of the numbers for the SarbOx compliance costs, they may be completely off but I swear I remember reading somewhere that the costs were in the range of 6-figures, also I was kind of assuming that the costs would vary somewhat with the size of the company and the complexity of their balance sheet in that costs for firms like Boeing, Microsoft or Citibank would likely be more than for a start-up or recent IPO'd small-cap.

I agree that excessive regs can discourage investors and wasn't trying to really defend SarbOx (the first serious analysis of the plan I read said that nothing about it would have prevented Enron if it'd been in place in 1996, so I'm not even sure what it's actually designed to accomplish), I'm just not sure that it in particular is a dealbreaker for those looking to go public (although it's hard to imagine it helps in any way).

I'd say the bulk of the regulatory risk at the moment is the uncertainty over what sort (and how many layers) of new rules might get rammed through under the current Pelosi/Reid regime with a Dem president who's unlikely to even threaten a veto on such bills. Especially with guys like Dodd, Durbin and Schumer needing to get their constituents not to notice that they voted for the Glass-Steagall rollback that made "too big to fail" possible in the first place.