Experts say financial compliance regulations are expensive, but well worth it.
Refined corporate governance policies and increased financial transparency will help Silicon Valley startups in the long term despite high short-term costs, according to a panel of executives at the Red Herring Fall conference.
It typically costs small public companies some $1.5 million to implement the corporate controls under Sarbanes-Oxley regulations, according to an analysis by Charles River Associates. Sustaining that control will cost another $900,000, according to the analysis.
However, public markets and potential acquirers will more readily embrace startups and small public companies that have solid financial reporting policies, Peregrine CEO John Mutch said during Wednesday’s discussion.
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