> Going public comes with a lot of work, expectations, obligations, and has a high requirement for corporate maturity.
>I think what we actually want is the ability for us normal people to invest in private companies more easily
I think these two sentiments both make sense and are in tension with one another. A lot of the work of going public is putting the company into a state that outsiders can understand. Preparing a prospectus isn't just writing down what exists, it's ensuring that there are controls in place to check that expectations are being fulfilled.
An individual can decide that one or more of the requirements to go public aren't important to their particular investment strategy, but that choice involves a certain level of expertise about how public companies work v.s. how this particular private company works. So you're really suggesting that we should let individuals make their own choices about if the current circumstances of a private company make it suitable for investment. That's, as you said, a lot of work. We generally demand companies do that work before they can receive money from public markets. It's unfair, because it means wealthy individuals can get in early on companies, but the whole reason they can decide which companies to get into early is that their wealth gives them access to the resources to evaluate these companies. Allowing people to enter into investments they don't have the resources to evaluate is not going to, on average, help people build wealth.
Personally, I think we could have more "levels" of public-ness. But I'm also aware of the penny-stock scams of the recent decades and think that opening up private companies to early investment has all of the same problems.
This is an important point to make; usually I am in favor of letting people do anything that they want to, however, the higher-risk it is, the more we should require them to demonstrate knowledge of that risk. But, critically, I'd prefer it to be about knowledge, rather than net worth or social connections. This is still much easier said than done (and as we saw from cryptocurrency IPOs, there are disastrous consequences from just letting people invest in anything they want to with zero laws or accountability, but that is obviously one extreme end), but I think there's still some room for easy improvement.
>I think what we actually want is the ability for us normal people to invest in private companies more easily
I think these two sentiments both make sense and are in tension with one another. A lot of the work of going public is putting the company into a state that outsiders can understand. Preparing a prospectus isn't just writing down what exists, it's ensuring that there are controls in place to check that expectations are being fulfilled.
An individual can decide that one or more of the requirements to go public aren't important to their particular investment strategy, but that choice involves a certain level of expertise about how public companies work v.s. how this particular private company works. So you're really suggesting that we should let individuals make their own choices about if the current circumstances of a private company make it suitable for investment. That's, as you said, a lot of work. We generally demand companies do that work before they can receive money from public markets. It's unfair, because it means wealthy individuals can get in early on companies, but the whole reason they can decide which companies to get into early is that their wealth gives them access to the resources to evaluate these companies. Allowing people to enter into investments they don't have the resources to evaluate is not going to, on average, help people build wealth.
Personally, I think we could have more "levels" of public-ness. But I'm also aware of the penny-stock scams of the recent decades and think that opening up private companies to early investment has all of the same problems.