In those days, investors who liked speculating on risky tech companies had plenty to choose from. Risky tech companies, meanwhile, could raise capital easily to fund their growth.
Would you Invest in Facebook
And how did both sides do? Well, sometimes these speculative bets worked out (Cisco, Amazon, Netscape, Yahoo, et al). Sometimes they didn't (hundreds of other companies that seemed like a good idea at the time). But both sides understood--or should have understood--the risks involved, and the market facilitated the free flow of capital and served both constituencies.
But then, in an effort to protect investors from fraud (which is actually not the reason most IPOs fail), the government erected huge new barriers to going public, making it prohibitively expensive for most small companies to IPO.
So now small, speculative companies generally don't IPO.
Source: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/01/03/businessinsider-goldman-clients-get-private-access-to-facebooks-ipo-but-you-cant-2011-1.DTL
Would you Invest in Facebook
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