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I worked for a company a couple of years ago that was planning to public in a year or two. The CEO told us that complying with SOX would cost $3 million for the IPO and over $1 million per year after that. That's a huge burden for a company with revenues of $35 million at the time. I have read that it is now $5 million for an IPO and that no company with revenues under $100 million can afford to be public. Malone says that there were 6 high tech IPOs in 2008 compared with 269 in 1999, similar numbers in earlier years.

The failure of IPOs isn't going to affect entrepreneurship, but it could well affect VC funding because it eliminates their primary exit strategy.

Malone does have a point about the FSAB. Treating options as an expense does make them less attractive to public companies, but it was an attempt to correct some egregious excesses. As usual, slap the big guys and hurt the little guys. Mark to market is an attempt to keep companies from hiding their investment losses in bookkeeping. The downside is that it makes their net worth much more volatile. AIG was a blivet in any case.

Cutting capital gains was good. Giving Reagan credit for the boom of the 90s is pure BS.

Cut the WSJ some slack. This was an op ed piece from an outsider. Malone used to be a San Jose Mercury News Reporter. He usually has something useful to say and he has the interests of the developer/entrepreneurial community at heart.

Malone isn't crediting Regan for the internet boom of the 90's. He is saying that cutting capital gains taxes helped spur the electronics boom in the 80's. Since we have had relatively low capital gains taxes for the last 30 years, and most of us agree that low capital gains taxes are a good thing for innovation, why would we consider raising them now?

I do think its interesting that, even when Obama was talking about the potential for large cap. gains tax increases, he made a point to exempt "small businesses and startups." I'm not sure how we could draw that line, but it indicates to me that Obama has exactly Malone's general argument in mind.

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