Netscape founder-turned-venture-capitalist Marc Andreessen said the declining number of initial public offerings is hurting performance of public markets and would affect the millions of Americans who hold retirement savings in the stock market.
Speaking on CNBC, Andreessen said the reluctance of so many private companies to go public was weakening market returns, which could hurt performance of retirement funds and workers' ability to retire.
"The vast majority of the interesting companies that are in the $50 million-$100 million revenue stage... those companies are just staying private," he said. Such companies have traditionally held the sweet spot for IPOs, Andreessen said.
Editor's Note: Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.
Entrepreneurs stewarding private companies hear what he called "campfire stories" of constraints their colleagues encounter after going public, Andreessen said, which encourages them to stay private.
Proponents of rules public companies must follow, such as strict internal controls, say the rules help avoid abuse. Opponents say many of the newer rules are too strict and costly.
Andreessen said he urged his companies to go public with dual class stock. That means one category of shares, often held by the founders, has outsized weight and can outvote holders of the other categories.
"They have to be able to repel all the people who come attack them once they go public," he said.
Andreessen spoke positively about the development of the technology sector, particularly the possibilities created by the rise of the smartphone.
"It's prime time for new technology," he said.
Andreessen also expressed support for JP Morgan Chase Chairman and Chief Executive Jamie Dimon, who has come under attack from shareholders who want him to give up his chairman role.
Editor's Note: Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.