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Comment by veyron | Hacker News Reader

Facebook was not required to go public.

I've posted this many times, including http://news.ycombinator.com/item?id=3753915

They were required to make disclosures but no one forced them to go public. Plenty of companies have more than 500 shareholders yet still opt to remain private.

> Companies with more than $10 million in assets whose securities are held by more than 500 owners must file annual and other periodic reports. These reports are available to the public through the SEC's EDGAR database.

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A company forced to file these reports essentially has all the costs of being a public company. There's absolutely no reason not to go public at this point, to benefit existing shareholders. The average op-ed writer is ignorant about finance but this is what is meant when informed people talk about companies being forced to go public--they're forced to take on all the costs of being public, so might as well just IPO.

They are forced to take some of the economic costs of being public, but the managers have much more flexibility when the company is private. For example, Facebook's acquisition of Instagram would not fly if FB were public when that happened.

You can argue that the paperwork is onerous, but its paperwork. The headaches involved with public companies go far beyond a few paltry reports.

Not at Facebook. Zuck still owns a majority of the voting shares. The board has almost no teeth an couldn't have stopped the Instagram transaction if it wanted too.

> ... the managers have much more flexibility when the company is private. For example, Facebook's acquisition of Instagram would not fly if FB were public when that happened.

Is that really the case? In other words, what additional restrictions does a publicly-listed company have that privately-traded companies do not have?

Your comment seems plausible, but I could imagine that the SEC regulations around > 500 shareholders etc. could also include all the shareholder protections we associate with public companies, as well.

Additionally, I wouldn't be surprised if Mark Zuckerberg's controlling interest in FB had some sort of an impact on what regulations apply to the company.

Presumably there are some advantages to remaining private since there are plenty of large US corporations which choose to do so:

http://www.forbes.com/private

I couldn't find any reliable sources for what the advantages were though.

Thanks for the correction. Various news sources have made the same mistake, and I must have picked it up from one of those.

Please stop shouting.

Please accept my apology for shouting.

Many threads regarding the Facebook IPO are littered with people repeating the same idea that Facebook was forced to go public, based on a faulty understanding of SEC regulations. And no one, especially late stage YC companies, should feel pressured to IPO.

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