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.
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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!