DAVOS, Switzerland – Government efforts to protect the investing public have had the unanticipated consequence of making it prohibitive for start-ups to seek a public offering, said Bill Gross, chairman of the technology incubator Idealab.
Speaking at the World Economic Forum, Mr. Gross said that efforts in the United States to roll back regulations through the JOBS Act in order to encourage innovation were a step in the right direction.
But the regulatory demands and associated costs remain “way too expensive” for young, innovative companies to engage in initial public offerings.
“I think we have swung overly too far in trying to protect investors,” Mr. Gross said. “I think we need to swing back.”
Mr. Gross was speaking as part of a panel discussion on how regulation and public policy can be engineered to foster innovation.
Clayton M. Christensen, a professor at Harvard Business School, said that regulators needed to take a minimalist approach if they want to encourage growth and innovation.
Government intervention, many times, is driven by the “sins of past generations,” Mr. Christensen said.
“I have a real aversion to the idea we should be guided by the past,” he said.