Start-ups increase time spent as private companies

A new report based on data from Thomson Reuters shows that companies are spending more time as private companies before going public.

Asking why, the Los Angeles Times spoke to J2 Global’s chief executive, Hemi Zucker, who stated that companies experiencing high growth were not for sale, and that companies growing more slowly still had enough cash to continue to grow slowly and wait for better options. The report from Thomson Reuters showed that public offerings have brought in significantly less money than they did during previous booms in venture capital.

The Times also pointed to public stockholders, who claim to be more careful about pricing after the dot-com boom of the late 90s, and also that financial reporting requirements that were enacted after the late 2000s financial meltdown are more expensive and difficult to comply with.

What does all of this mean to companies such as a print franchises in the current climate?

According to the Times, the current availability of investment cash from institutions means that start up founders can manage their businesses without needing to either publicly report their financial numbers, or put up with Wall Street’s interference in their business. Having a great deal of capital access also means that founders have more clout if a big company approaches them with a buyout.

Ian Chen, CEO of Discotech (an app that allows people to buy tickets and book tables at clubs) said that if his company got an offer that would help them achieve their mission faster, then he’d take it, but otherwise, they could afford to wait for that great offer.