The conventional wisdom in Silicon Valley since the dot-com bust has been that if a startup is not strong enough to be taken public by Goldman Sachs or Morgan Stanley, then it shouldn’t go public. As venture-backed companies begin to emerge from the recession-forced cocoon, we’re finding that conventional wisdom may no longer apply.
Most CEO’s and venture capitalists defer to the giants in the public offering industry simply because of their brand power. For 7 percent of the deal, the major banks will field a team to prepare and sell the company’s securities. It doesn’t matter if you’re getting the B team or the C team, you still have the Goldman, Morgan Stanley, JP Morgan, Credit Suisse, or Bank of America/Merrill Lynch name behind you
Admittedly, the big banks do have something to offer, but these days so do the smaller banks.
To read the full, original article click on this link: Thinking IPO? Old underwriter rules no longer apply | VentureBeat
Author: Tom Klein
