For years, the desire for a company to go public was all the rave. Economic success and industry fame marked this trend. Many start-ups fought to fulfill this dream, looking to make it big by announcing their public offering. Today’s market is gaining momentum for private companies—they are staying private longer.
Public markets tend to focus more around short-term earnings instead of long-term growth, which affects a company's decision-making process. In turn, public markets tend to align less with the long-term interests of companies nor do they allow for the type of corporate governance or transparency into ownership.
Private markets enjoy the sense of autonomy and relative ease when it comes to reporting, yet they do not have the liquidity infrastructure to seamlessly transfer private company equity without great expense. However, despite some costs accompanying a public-to-private transition, a myriad of financial and operational benefits for private companies create better long-term, sustainable growth.
Companies will find many ways to save costs, either by remaining private or deciding to delist. This trend here is already evident: the number of publicly-traded companies dropped by 52% from the late 1990s to 2016. The rules and regulations governing public company operations and disclosures have become increasingly complex over the years, and the corresponding expenses to stay compliant are considerable.
At Nth Round, we’ve seen how private companies appreciate having control over their own equity, and the ability to trade in a secure, private, and transparent environment. Employees and shareholders post bids and asks, trading directly amongst each other. With our Indications of Interest feature we provide private businesses with an elegant, easy-to-use means for investors and shareholders to trade larger blocks of equity. Inherent parameters in our equity management platform controls who may participate, in what manner (if purchasing is allowed), and to what extent (like how much of each shareholder’s equity may be traded). If desired, trading “windows” may be enforced to concentrate supply and demand. Or, companies may choose to facilitate "off-window" transactions. At any time, you and your team will be able to see summary statistics and provide real-time insights into user activity, as well as aggregate supply-demand balances.
Not only does our platform provide the tools to enhance a private company’s equity, it also provides the support and capabilities to assist with the public-to-private transition. In a recent Technical.ly Philly article featuring Nth Round, CEO Graham McConnell said, “Private companies care about who has access to their equity, and we made the decision to put the control in their hands.”
Visit us at www.nthround.com to learn more about the benefits and features we offer to help businesses power up their equity.
Amanda joined Nth Round inspired by the vision, passion, and relational-driven mission of the company. A trained historian, Amanda enjoys the daily analysis and research she uses to better understand and connect to clients on a more personal level. A successful athlete and scholar, Amanda captained the field hockey team at Stanford University, earning Academic All American and all conference honors during her time there. She leads Customer Success, providing an enjoyable experience for clients through her support to ensure success for companies and their shareholders.