http://dealbook.nytimes.com/2011/01/03/facebook-and-the-500-person-threshold/ http://dealbook.nytimes.com/2011/01/03/facebook-and-the-500-... The reason lies

http://dealbook.nytimes.com/2011/01/03/facebook-and-the-500-person-threshold/ http://dealbook.nytimes.com/2011/01/03/facebook-and-the-500-... The reason lies on the technical shores of the federal securities laws. The Securities Exchange Act of 1934 sets forth certain requirements for companies to register their shares with the S.E.C. Specifically, Section 12(g) requires that a company register its securities with the S.E.C. if it “has total assets exceeding $1,000,000 and a class of equity security … held of record by five hundred or more … persons…” Facebook went public because they were forced to, not because they wanted to.