It’s taking longer and longer for venture capital-backed companies to go public. In my last conversation with Barry Silbert, CEO of SecondMarket, a couple of months ago, he told me that the runway to IPO has pretty much doubled over the past decade (I interviewed him for an article on the IPO market in IR magazine’s new research report, Investor Perception Study, US 2012).

Of course, this has been a big story for the private secondary markets, as well as other small-cap market advocates, who claim that the capital markets are currently broken. Well, it looks like a familiar face is now beating this drum, too. Frank Quattrone, the (in)famous investment banker from dotcom 1.0, has weighed in, according to Business Insider.

According to Quattrone, companies are waiting longer to go public because:

1. Following the dotcom bust a little over a decade ago, investors have ‘demanded higher liquidity for public companies,’ reports Business Insider

2. The focused changed – instead of ‘small allocations of recently public companies,’ investoment managers moved over to mutual funds

3. Demand for the big banks (e.g., Morgan Stanley and Goldman Sachs), and a shorter roster of banks ‘trusted to take companies public,’ has affected the pre-IPO market dynamic

4. New regulation has certainly come to bear on the IPO market over the past decade – remember the introduction of the Sarbanes-Oxley Act?

5. There are now some options for early liquidity, including private secondary markets such as SecondMarket and SharesPost

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Source: Business Insider