“By expanding a popular JOBS Act benefit to all companies, we hope that the next American success story will look to our public markets when they need access to affordable capital,” SEC chair Jay Clayton said in a statement. “We are striving for efficiency in our processes to encourage more companies to consider going public, which can result in more choices for investors, job creation and a stronger U.S. economy.”

According to the agency, “the non-public review process after the IPO reduces the potential for lengthy exposure to market fluctuations that can adversely affect the offering process and harm existing public shareholders.”

Shriram Bhashyam is a co-founder and general counsel of EquityZen, a New York-based company that gives a platform to employees of pre-IPO companies like Spotify and Lyft so they can sell equity to accredited investors.

The former Shearman & Sterling securities associate views the rule change as a clear shift in tone coming from the Trump administration, specifically from the SEC and its new chairman.

“This is an important development,” Bhashyam said. “This could encourage companies to go public sooner and to remove friction from the process.”

Bhashyam explained that the initial period between the nonpublic registration filing and trading will help the in-house lawyers and issuer's counsel who are dealing with the IPO. “They can get a view into how the SEC would receive the draft registration statement without having it be in the public light,” he said.

Other attorneys can see the benefit as well. Steven Bochner, a partner at Wilson Sonsini Goodrich & Rosati specializing in securities law, told The Wall Street Journal in an interview, “It provides companies with flexibility in markets that are uncertain to start the process without the fear they might not complete it and still expose their confidential information to competitors, and incur the stigma associated with announcing a process and being unable to complete it.”

Sterling Miller, senior counsel at Hilgers Graben and a former general counsel, is less optimistic about the changes private companies and their in-house lawyers could realistically see. In fact, he believes this rule change “will have marginal impact on whether companies decide to go public or not.”

“The bigger issues around reluctance to IPOs are not addressed by this move, though any step toward lowering regulatory hurdles is welcome,” Miller said. “If the SEC wants to encourage more companies to go public, they need to reduce the overall burden of compliance, which includes [Sarbanes-Oxley] compliance, Dodd-Frank and all of the disclosure burdens.”

Miller cited CEO pay disclosure as one example of the “disclosure burdens.” “These are very costly to comply with and have dubious value in terms of making the markets better,” he said.

During his time as general counsel of Sabre Corp., the company became privately held and then went public again, years later in 2014. Miller was astonished that “it added millions of dollars to comply” with federal regulations as a publicly traded company.

Plus, with the boom in private equity, Miller said there is less incentive for companies to enter the public market.

“Company owners have to think really hard about whether the money raised via an IPO is that much better than private investment and the ability to build your company outside of the regulatory process and burden,” he said.