An academic study titled “The JOBS Act and IPO volume: Evidence that disclosure costs affect the IPO decision” (Dambra, Field, and Gustafson, available through SSRN) provides an interesting analysis of the effect of the JOBS Act on IPO activity. The study catalogues certain provisions of Title I of the JOBS Act as “de-burdening” provisions (principally the disclosure accommodations available to EGCs) and others as “de-risking” provisions (confidential submission and testing-the-waters).
The study notes that in the United States, IPO volume has been 50% higher in the two years following the JOBS Act, whereas, in contrast, IPO activity in other jurisdictions has increased by only 14% over the same period. The study concludes that the de-risking provisions may be driving the increase in IPO activity, and focuses on biotech IPOs in the paper, premised on the theory that biotech companies have high proprietary costs of disclosure. The paper is accompanied by various tables that provide interesting data demonstrating that post-JOBS Act issuers generally are smaller (in the two years prior to the JOBS Act, median issuer annual revenues were approximately $80 million, and post-JOBS, median revenue is approximately $48 million). However, when compared to the late 1990s and early 2000s, there are fewer smaller company IPOs. The study also looks at whether there has been any change in analyst coverage and finds little effect as a result of the JOBS Act.