Imagine that you are a startup founder and CEO. You toil for years in the hot sun, painstakingly cultivating your business as it grows from a vulnerable seed into a promising sapling. It’s grow or die. You grow.
Now you want to transform your business into a mighty oak. To do this, you need more capital. And, because you have created an awesome business and because you are in the United States, you have the privilege of accessing the deepest, safest, and most liquid public securities markets in the world.
As you ring the Nasdaq bell, your son at your side, a small tear gathers in the corner of your eye. The stock doubles in the coming days. Your hard work has paid off. You’ve made it.
Fast-forward to a year later. You have continued to diligently tend your plot, but you have learned that reaching the next stage of development is even harder. You are experiencing growing pains; you miss your ambitious targets. Your stock price starts to fall and ultimately it falls below your IPO offering price.
A few weeks later, your lawyers report some bad news. Investors are banding together in a class action to accuse you of securities law violations. But you didn’t do anything wrong! You…
