Emerging Growth Companies in 2012: A brief retrospective
Since the JOBS Act was signed into law on April 5, 2012, instantly giving the term “Emerging Growth Company” a specific legal meaning, more than 700 companies have embraced that label — along with the looser regulatory burden it offers. Now that we’ve closed the books on 2012, we can make a few quick observations on the data:
- The total number of companies declaring EGC status in 2012 stands at 705. Prominent EGCs include Priceline.com, Restoration Hardware, Shutterstock, Manchester United PLC, and Fender Musical Instruments Corp.
- Of those 705 companies, 31 took advantage of the new “Test the Waters” provision of the JOBS Act in which EGCs are allowed to initially file IPOs confidentially.
- About 12% of all EGCs from 2012 are blank check companies. (Many have argued that blank check companies taking advantage of EGC status is counter to the JOBS Act’s goal of creating jobs; read more here.)
- About 15% of EGCs are headquartered outside the US – increasing the likelihood, one would assume, that any job creation to come out of the new business would also be centered outside our borders.
- About 7% of EGCs are incorporated outside the US, some in offshore tax havens such as the Cayman Islands, the British Virgin Islands, Bermuda, Luxembourg, and the Isle of Man.