VCs aren’t the only ones whose nostalgia for the go-go ’90s grows as the IPO drought stretches on. Frank Quattrone misses them, too, and in fact, yesterday, he publicly argued that a little deregulation might let everyone relive the experience.
Speaking at a conference at Stanford University, Quattrone blamed the dearth of IPOs today to Eliot Spitzer-era regulations that keep sell-side analysts from being compensated for getting startups public. (When Spitzer was New York Attorney General, he made it impossible for bank analysts to act, and be compensated, like salespeople.)
Quattrone has reason to be down on the government. He was the world’s most powerful technology investment banker until becoming the focus of a protracted government investigation into how investment banks allocated IPO shares. Quattrone was exonerated after fighting the charges for nearly four years.
He also has self-interested motivations that probably include some degree of boredom. After briefly flirting with the idea of raising a private equity fund last year, Quattrone instead opened a boutique investment bank, Qatalyst Group. Likely the experience can’t compare with his high-flying days in the ’90s at Morgan Stanley, Deutsche Morgan Grenfell and Credit Suisse First Boston, a period during which he took numerous companies public, including Cisco and Amazon. (As everyone knows by now, not a single U.S. venture-backed company IPO’d last quarter.)
Hooked to a giant lie detector test, many in the industry would probably concede that scrapping Spitzer’s reforms is a bad idea. For those on the fence, Megan Barnett of Portfolio (and formerly a research associate at Hambrecht & Quist) argues why they should climb down it here.
(Btw, do read the comments after the piece. If you haven’t been on a municipal bus recently, “Orangeman” will undoubtedly bring back memories.)