Great topic, and a great viewpoint. Within our specialisation (the ICT industry in Australia) a hold-over view from the dot-com era makes public listing a common target for growth (and would-be growth) companies. We suspect this is largely because it conjures up images of riches, kudos and status magically bestowed on principals, and generous benefits cascading down to employees. As such, it makes a great motivating goal – but the goal is generally set very close at hand.
Many principals see $20 million revenue as a viable level for listing but, while it is possible to list at this scale, it is very seldom a positive experience and the costs of listing and maintaing the listing (in dollars and time) almost always extinguish the firm’s ongoing growth prospects beyond the listing deal itself.
Often, we have found that where public listing plays a positive part in an ongoing strategy, vending the firm into a larger player who is already listed can often achieve the same ends, while bolstering scope, scale, management capability, and defray the ongoing costs effectively. The key difference is control – and if the principals can’t accept the need to share control, then the growth plan is probably inherently limited anyway.
Keep up the great work!