Chris Onan, a principal at Denver's Appian Ventures, invests in privately held businesses he thinks are poised to grow.
But he says venture-backed companies that want to be acquired or go public are making a mistake by not preparing to comply with federal regulations mandated for public companies.
Onan said public companies looking to buy a venture-backed firm can deduct millions of dollars from an offer if the venture-financed company is not compliant with the Sarbanes-Oxley Act of 2002, the corporate accounting overhaul passed by Congress in the wake of accounting meltdowns at Enron, WorldCom and others.
"There needs to be some groundwork laid out," Onan said of Sarbanes-Oxley. If not, "A $50 million offer could turn into $45 million." Onan's opinion was confirmed by a nationwide study due to be released today.
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