A host of factors — including electronic trading and the dominance of hedge funds — have skewed the system to incentivize short-term focus. Company CEOs need to take back control of the aftermarket.
Silver Spring Networks filed for a potentially $150 million IPO this week, but the group that stands to gain in the short term is Silver Spring’s stead fast venture backer Foundation Capital. Foundation Capital owned 41.5 percent of shares before the offering.
A lot has been written about the venture capital industry and how its problems affect Silicon Valley’s (proverbial) innovation machine. And that certainly is true, but the bigger problem for the technology industry has been the IPO market, which mirrors the pitching average of New York Yankees’ closer Mariano Rivera. This lack of public market liquidity is a much more systemic and longer-term problem, one that was brought home by a research report issued by Jeffries & Co, a small investment bank. Read More about IPO Drought Hides Bigger Tech Woes