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Is Staying Private Better for Entrepreneurs?

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  • Description

    Sageworks CEO Brian Hamilton explains why fewer entrepreneurs want to go public now.

  • Duration 3:21
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Let's talk FaceBook it's in freefall again hitting another new -- -- nineteen dollars and a penny a share.

Has three months after it went public at 38 box and Groupon also -- -- -- other day at 451.

It went public in November -- twenty dollars a share.

Stand private often is better for offered -- -- going public Sosa's.

And CEO and co-founder -- works which collects financial data about private companies Brian do you think -- FaceBook face plant.

It's gonna make it more often north cannot -- -- Bob -- to go public markets.

I don't think so -- is it's an aberration.

Facebook's problem was it was overvalued so I don't think so I really -- and yet you say that few rocks or -- -- go public why is that.

Well here's the thing 2030 years ago the only way to get liquidity to get a return.

Was to go public or sell your company right now we've got secondary markets.

We've got other options for entrepreneurs to get money can get a return so that's really what's driving this.

There's other negatives to entrepreneur awards are not foreign people -- not regulation people that this is not how -- -- they don't wake up in the mornings I want -- -- on SEC form.

It's not who they are so it's not just the return to its all the forms -- paperwork regulation.

You've got personal exposure would get all that together and the fact that there's other alternatives and so right now staying power -- is not a bad alternative.

Right you wrote an article on this viewpoint on article that -- do an audit.

For a publicly held company cost an average of 3.3 million dollars.

For a private companies like 200000.

-- and you said when you do a fifteen million dollar IPO the direct cost of stage in the IPO.

Our five million -- that's at 10% big going on there.

Private transactions or just far more efficient and cheaper does -- just regulation the only reason.

No question what's good for lawyers and accountants right no question about that but -- entrepreneurs to carrying cost or hide no doubt about it.

In really again that is that big picture here is the market.

A -- a vacuum.

There's other ways to get liquidity so if you're balancing -- on your personality and all the regulation.

You've got to look at that say do I really need to go public one good thing.

2030 years ago when I was coming out of school I won't give the exact date.

It was cool to go public that was the thing that these are meant that you made it right.

That's psychology is changing right now -- among younger entrepreneur or so it's not.

You know.

I invalidated because on public it's should I go public what do like get what are the cost and what do I have to put up with.

Right now but it should investors in the stock market loved meant the trend of secondary markets allowing on first to stay away from the IPO because.

Investors get fewer options to invest then.

Great question remember.

-- about 1010121000.

Publicly traded firms and others about 4500 he's going down there are fewer options great question.

But here's what's gonna happen no doubt.

There's going to be a secondary market it's just forming right now it's gaining energy in so.

Auction further going to be able to raise money that way and investors are gonna be invited in as well.

-- -- back talk about that thank you very much for being with us Brian Hamilton that we can think.

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