The vital entrepreneur: high impact at its best

Private companies

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Freedom to operate with a longer term view

Private companies are the dominant force in high-impact entrepreneurship, and they are also by far the most highly represented in our finalist group, at 88%.

Some of our private company finalists are at the beginning of their life cycle, so it stands to reason that they tend to be younger, smaller and faster growing than their public company counterparts.

As they progress through their life cycle, some of these companies will choose to go public, some will seek external investment and others will remain private. But while they remain private, what really makes them different is their independence, flexibility and freedom.

EY - The vital entrepreneur

Low key, high impact

Unlike public companies, private companies generally are not required to publicly disclose — and comment on — their financial and business data.

That means private companies can take a longer-term view of their business, free of market pressure to deliver short-term performance and less subject to competitors’ knowledge of their business activities, especially in investment, innovation and R&D.

They also appear to face less financial pressure. Our private company finalists have historically funded themselves with reinvested earnings (50%), bank loans (35%) and their personal networks (29%).

It’s worthwhile to note that although a large percentage plan to enhance the availability of cash through working capital management (44%), many are also contemplating raising external investment from private equity or venture capital (38%) as the next step in funding their growth.