Sarbanes Oxley and impact on VC's in the U.S

The Sarbanes Oxley, passed by both Houses in 2002 is bound to have a profound impact on the VC community in the U.S.

Put simply, the act imposes many stringent regulations on companies that wish to file for a public offering(IPO). For VC's this means that far fewer of their portfolio companies will go public, and an acquisition by a bigger company is the most viable 'exit'. These acquisitions typically do not fetch as much as a firm going public, and hence VC's find it harder to earn returns manadated by their LP'S.

So what does one do? Well, think creatively. There is already talk of US companies listing on the Toronto Stock Exchange or London-affiiliated exchanges like the AIM. The other alternative: invest in companies abroad.

And this is where India comes in. With a vibrant capital market, India lists the largest number of publicly listed firms, worldwide. The acquisition market is also heating up. Indian corporate powerhouses -- Reliance, Infosys, Wipro etc have huge war chests and have indicated their wilingness to use acquisitions as a means to growth.

This is why the smart money is betting more and more on India. I suspect that it will be one of th hottest markets, worldwide, for investing in the next decade.

Next, I'll try and research ways for the average US resident to invest in India.

Ciao