Why You Don’t Need Investors


Why You Don’t Need Investors

By Liz Elting

The Wall Street Journal - June 5, 2013

Privately held companies are rarely celebrated — at least not in the public sphere. We don’t see Hollywood blockbusters about enterprises that grow organically without outside funding. And it’s not often that bestselling authors trumpet businesses that turn down acquisition offer after acquisition offer.

For a lot of startups, though, staying private is the best possible outcome. It’s not the fastest outcome. It’s not the sexiest outcome, perhaps. But it can be the most beneficial one for founders, employees, and ultimately, customers.

I didn’t always know this. In the 20-year history of the company I co-founded with Phil Shawe, we only took outside financing once. It was the height of the dot-com bubble, and we decided to start a second company with the help of investors. From the beginning, it didn’t feel like us. As entrepreneurs who bootstrapped our startup, we were never comfortable reporting to a third party. Eventually, we bought out our investors and merged that venture into our privately held company.

Before that experience, and ever since, we’ve reinvested revenue into growing the business. We’ve bought 10 small companies around the world, and we paid for all of them with cash flow. We’ve fielded frequent calls from bigger businesses that have wanted to talk acquisition, but those conversations have been short. It doesn’t take long to say, “No, thank you.”

Our company’s origins are modest (we founded TransPerfect in a dorm room at NYU), but we’ve grown into a $350 million business without handing over one cent of control to someone else. Day to day, that decision means that we can make the best possible choices about how we serve customers, how we develop staff, and how we grow — all without asking permission from a stranger who holds the purse strings. It may make for some late nights and extra stress, but maintaining that kind of influence over our own corporate destiny is what entrepreneurship is all about.

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