Middle Market Deals and how to buy, sell and raise capital from $5 to $500 million

Lorne Groe, a blogger who writes about things interesting to me, recently shared his thoughts on the scale (in revenues) required to effectively go public (in response to a query from me). 

He says, in summary, that on average tech companies have trailing revenues of $82.6 million with year-over-year growth rates of 39.3% prior to going public.  This is a great bit of information, for which I thank Lorne. 

He added the following: 

Here is what's interesting to me - based on my quick analysis of the current valuation multiples for the class of 2005, only 60% are trading above were they would have likely been sold.Here is what's interesting to me - based on my quick analysis of the current valuation multiples for the class of 2005, only 60% are trading above were they would have likely been sold.  So the question I have is why risk it?

I couldn't agree more.  The cost of being public is so high that it is almost impossible to do an apples to apples comparison.  If a company weren't public, how much higher would its profits be?  Would revenues and margins benefit from the shield preserved by private companies?

I believe that savvy entrepreneurs and investors have largely changed their thinking about the optimal exit--no longer an IPO.  Instead, they're looking for the optimal M&A exit.

There are, I suppose, times when a company should seek to go public, but I wonder if it is optimal even at the level where the market executes today. 

Lorne suggested in his post that I research IPO data for non-tech companies.  I'll do it.  Watch for it!