Many entrepreneurs who are working on start-ups of the Silicon Valley type in particular love to talk about their exit strategy once the venture they’ve founded blows up and realises the success they envisioned. In most cases the standard reference to their exit strategy is indeed that of the IPO – the Initial public offering, which signifies the listing of their company on the Stock Exchange.

Spotify recently came into the spotlight as a company which is bucking the trend a bit when they didn’t go the traditional IPO route, but rather listed directly and opened up trading proceedings by allowing shareholders to trade their shares directly. That’s very refreshing to read about, however in this post we’re going to focus on companies that remain private, choosing never to list on the Stock Exchange.

Although some of the other companies which fall under the Virgin Group parent company have indeed gone public with their own IPOs, generally the inspirational entrepreneur Richard Branson has kept his businesses private. There are so many advantages to this approach to running your own operations as an entrepreneur and I can personally see why this would be alluring to many true entrepreneurs.

For one, going public will likely have the new board which must be roped in quite rightfully ousting the founder as the main operator of the business side of things – I mean I’m pretty sure you’ve heard of stories of the likes of Steve Jobs having been fired from the CEO position in a company he built himself. Additionally, when a company has been listed publically then there are all manner of protocols which must be followed as part of the legal requirements to legitimise the company’s operation, such as having to hold an annual general meeting in which a minimum number of stakeholders have to attend in order for it to be officially recognised.

That in itself isn’t a bad thing at all, but its implications make for a very daunting prospect for true entrepreneurs who thrive on spotting opportunities and acting on them when they first get the chance to capitalise. Of course I’m talking about having to put key decisions to the vote amongst the shareholders and board before they can be taken. Imagine you spotted an opportunity for growth which if not acted upon immediately it could very well disappear and your hands are tied in the moment because you first have to call around and contact all the key stakeholders and try and get them together so that you can put the impending decision to act on the opportunity to the vote…

Make no mistake about it though; as much as going the private company route speaks to the very heart of the true entrepreneur, it comes with a whole lot more responsibility which will have you having to figure a lot of things out as you go along instead of having a set out template you could follow. If your accountant is cooking the books for example, you have to be able to prove that you weren’t involved and that you didn’t authorise and encourage them down their rogue path.