Tech chief says JOBS Act 'renews faith' in Washington
Legislation signed today eases process for going public, says Rally Software CEO
Computerworld - WASHINGTON -- When Tim Miller, the CEO of Rally Software, received an invite to attend the White House signing of the JOBS Act, his first reaction was to say "no."
But then Miller read the bill.
The Jumpstart Our Business Startups had some provision that will directly impact his company, especially if it decides to go public, said Miller.
Miller traveled from Boulder Colo., to Washington to stand on the East Lawn Thursday with about 200 others, including some other high-tech executives, to watch President Barack Obama sign the legislation in a 10 minute ceremony.
"It has renewed faith that the government can do good, much more so than the gridlock we have seen over the last several years," said Miller, in an interview after the signing.
Miller's firm doesn't lobby, and he says the company has "no political agenda."
He said his firm was picked to witness the signing because Rally Software is "an interesting company" that could benefit from the bill.
Miller has been considering an initial public offering for Rally Software, which makes agile application lifecycle management tools.
Rally is growing. It employs about 300 people and is adding about 75 employees a year.
The average paycheck of its workers is over six figures, said Miller.
A company the size of Rally Software going public is expensive, in large part because of Sarbanes-Oxley Act, or SOX, requirements. The internal controls provision requirements of SOX alone would cost the firm about $2.5 million, Miller speculated.
Miller believes the JOBS Act may cut the cost of going public by a $1 million or more, money he said would be invested on hiring people.
The law also allows the firm to keep certain aspects about the company confidential to test the IPO waters.
Miller said that clause is crucial to his firm.
"How we charge for our services, what the economics of our business look like, are things that could be copied by our competition," said Miller.
The bill's disclosure rollback provisions of SOX has drawn criticism from some quarters.
For instance, the Consumer Federation of America contends that the bill will create opportunities for fraud and "reignite the abusive securities analyst practices that fueled the tech stock boom and bust," a reference to the 2001 tech implosion, which included Enron.
The legislation also includes a provision that allows startups and small businesses to raise up to $1 million annually "from many small-dollar investors" through web-based platforms, according to the White House. That clause has been called the "crowd funding" or "crowd sourcing" provision.
The legislation had strong bipartisan support in Congress, and Obama, in a statement, said the law "will help entrepreneurs raise the capital they need to put Americans back to work and create an economy that's built to last."
Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov, or subscribe to Patrick's RSS feed . His e-mail address is email@example.com.
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