A guest post from Portland Chapter of the Association for Corporate Growth (ACG)
Tightly held companies that have received debt or equity funding from private equity or venture capital investors contribute a disproportionate share of new jobs and sales when compared to other businesses. GrowthEconomy.org recently compared information from over 35,000 private establishments to information from Dun and Bradstreet’s database of 44.2 million entities. The results indicate that in the decade between 2000 and 2009 jobs rose 29.9% for these privately capitalized businesses while job growth declined three percent on average for businesses overall. Similarly sales rose 50.1% for the target group whereas sales at businesses in total declined almost one percent.
Oregon companies experienced similar results. Private capital company job growth was six times that of business overall in the Beaver state, while sales growth was a whopping 32 times that of the overall commercial population. In Washington the disparity was even more striking.
Kit Johnson, the incoming President for the Portland chapter of the Association for Corporate Growth (ACG) notes, “clearly companies that have successfully established this type of capital partnership have performed better overall. What is not as clear is if these businesses experienced this phenomenal growth as a direct result of private funding, or if the private funding was a direct result of early stage business fundamentals that were indicative of future success anyway. Often the two go hand in hand.”
GrowthEconomy.org is a collaboration between the Association for Corporate Growth, The Edward Lowe Foundation’s Institute of Exceptional Growth Companies and PitchBook Data, Inc., an independent provider of private equity research, data and technology.