TC50: Sprowtt automates early IPOs for startups

Entrepreneurs and venture capitalists complain frequently that few companies can have initial public offerings (IPOs) anymore, because the legal difficulties and compliance costs are so high. A startup called Sprowtt says many more companies will now be able to sell shares to the public, and to do so much earlier in their life, because its websites automates the process. The company launched today at the TechCrunch50 conference in San Francisco.

On the Sprowtt site, companies enter requested information and upload their businesses plans. This is the hard part to believe: Sprowtt says theyll handle all the legal details. Sprowtt says it developed its product with two law firms, though its not saying which ones.

Sprowtt users can then log onto the site and buy shares in the company, which they can then sell. In a way, the company is pitching itself as an alternate NASDAQ, though Sprowtt hasnt created an exchange for selling the shares yet.

To be clear, these arent traditional IPOs. Since companies are selling shares earlier on, theyll probably make less money. This is more like an alternative or complement to traditional venture funding. There are other companies trying to offer startups additional ways to achieve liquidity (i.e., sell their shares), such as SecondMarket. So far, though, startup founders still dream of ringing the bell on Wall Street.

Click here for more startup news coming out of the TechCrunch50 conference.

http://feedproxy.google.com/~r/Venturebeat/~3/_BMliI7DCQE/

--
This article was sent using my Viigo.
For a free download, go to http://getviigo.com

Sent from my Verizon Wireless BlackBerry

http://nhvc.blogspot.com/2009/09/tc50-sprowtt-automates-early-ipos-for.html

--
This article was sent using my Viigo.
For a free download, go to http://getviigo.com

Sent from my Verizon Wireless BlackBerry