Facebook COO Sheryl Sandberg told House Republican leaders that the company would not have been forced to go public when it did if a key provision in the new JOBS Act had been in place last year, according to House Majority Whip Kevin McCarthy and House Majority Leader Eric Cantor.
McCarthy relayed Sandberg's remarks in an interview with POLITICO and an aide to Cantor confirmed the Facebook executive had told the Virginia Republican the same thing.
Continue Reading It is not clear whether Facebook would have gone public eventually, anyway. The company declined to comment on Friday.
The new law raises the threshold at which companies have to disclose information to the Securities and Exchange Commission from 500 shareholders to one of two levels: either 2,000 shareholders, or 500 shareholders who are not qualified investors.
Companies have argued that they don't want to go public before they are ready, but the lower shareholder limit was forcing them to begin publicly disclosing information to the SEC.
Critics of the new law said some of the provisions were at odds in that the bill both made it easier for firms to go public but gave them more latitude if they didn't want to do so. But supporters said the point of the legislation is to give startups more flexibility to make the best choices as it ramps up.
This article first appeared on POLITICO Pro at 2:16 p.m. on April 6, 2012.
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