Small-Company Initial Public Offerings: The Impact of SEC Registration Form S—18

Abstract

This paper reports on the impact of SEC registration Form S–18 on the new-issues securities market. Form S–18 was intended as an easier, faster, and less costly alternative for small companies to raise public capital. The findings indicate that Form S–18 offerings were slightly less costly and were processed faster than Form S–1 offerings. They also suggest that Form S–18 has helped smaller, start-up companies go public, that potential investors may face additional risk when purchasing Form S–18 offerings, and that underwriters were sensitive to the added risk.