Because of the Jumpstart Our Business Startups Act, there have been 25% more U.S. initial public offerings annually, according to new research by economists at Penn State University and the State University of New York at Buffalo. The two-year-old law is designed to make it easier for companies with less than $1 billion in revenue to do an IPO.

Indeed, more small firms are showing up in the ranks of IPOs. “What's interesting about the recent IPOs is the number of smaller companies that have been able to go public, several with little or no revenues,” observes Brian Pearson (Valuation Advisors LLC). “Investors are clearly beginning again to get a taste for higher levels of risk and possible reward.”

Pearson’s firm offers the Valuation Advisors Lack of Marketability Discount Study, whichcompares the IPO stock price to pre-IPO common stock, common stock option, and convertible preferred stock prices. The study, used to help quantify a discount for lack of marketability (DLOM), has been given a boost from the increased IPO activity. Pearson reports that July was another record-setting month for IPOs, with almost 200 transactions added to the study and its online searchable database that now contains over 11,300 transactions.