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Private lessons

Gigi Sukin //December 11, 2014//

Private lessons

Gigi Sukin //December 11, 2014//

Throughout countless business community conversations, you’ll hear the same call to action:

“We need a big success; we need an IPO,” said Pete Khanna, CEO of TrackVia last year on a Rocky Mountain Tech Meetup panel.

Often initial public offerings are interpreted as symptoms of big things brewing and validation that the rest of the world is watching. Bold, buzz-worthy IPOs secure a spotlight and generous payday for the companies as well as the communities they’re stationed in. But it goes beyond that moment in time. It’s worth noting that public ownership comes at a cost, and the sparkle of the IPO can fade. Public companies spend great deals of time balancing the needs of long-term shareholders alongside the impulses of fast-money traders, and short sellers on the opposite end of the bet, eager to see the stock drop.

Last year, Forbes published an article titled: “70 Billion Reasons For a Public Company to Go Private,” as the formerly popular smartphone brand, BlackBerry, opted to return to its private roots in a last-ditch effort for survival. The piece warned: “If the public makes you rich beyond your wildest dreams when it buys your stock in an IPO, you then have to make sure the public gets a good return for gambling its retirement money on the fortunes of your shares.”

Interestingly, the value of “take private” deals skyrocketed from $14 billion in 2012 to roughly $80 billion by August 2013, according to data provider Dealogic.

Some of most recognizable businesses operate outside public markets and are able to thrive all the same.

“I think the local market is very responsive,” Khanna recently shared when asked how Colorado’s economy supports private versus public organizations. “The whole ecosystem understands that if you don’t support smaller, newer startup companies, you’ll never be able to create successful private companies and eventually even public companies. And I think the influx of capital and talent are sure signs that we have a vibrant and well-supported ecosystem of fast-growing private technology companies such as TrackVia (No. 204) or ReadyTalk or SendGrid (No. 75).”

This year, as evidenced by ColoradoBiz magazine’s Top 250 Private Companies list, leading private companies have experienced impressive growth thanks to a range of factors: innovation, emerging markets, focused leadership and good old-fashioned hard work.

Take a look at the list.