The Sarbanes-Oxley (2002) and Dodd-Frank (2010) acts have locked everyday Americans out of the high-growth stocks available only to the rich (“accredited investors”).

By the time companies like Dropbox and AirBnB go public after a decade, 90% of their gains have gone to VCs and big investors. In contrast, Google was founded in 1998 and IPO’ed after just 5 years, and 99% of its gains have gone to public shareholders.

These acts were enacted to “protect” the public from losing money after two different market declines, but the real effect has been to “protect” the public from being able to get rich alongside the already rich.

The insane amount of compliance work, and the insane exposure to liability, required of public companies mean that companies choose to stay private as long as they possibly can, likely taking lower valuations as a result.

This is of course bad for companies, but the real damage might be from a lack of public buy-in because, well, the public cannot buy in!

Just imagine how much more successful Uber would have been fighting in the court of public opinion against entrenched taxi cartels if the public had had a financial interest in the outcome?