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Submitted by Timothy J. Keating, Keating Investments, LLC

Public companies can enjoy many benefits, particularly significantly higher valuations and superior access to capital, compared to privately owned businesses.  These benefits are conditional on the existence of a “liquid” market for the company’s shares.  Illiquidity can prevent the stock of a smaller public issuer from achieving the higher valuations enjoyed by its peers, thereby negating one of the primary benefits of being public.  The goal of any publicly traded company, therefore, should be to have its stock become widely held, actively traded, fully valued, and covered by at least one research analyst.  But what exactly do these things mean? This white paper creates a framework for objectively defining and quantifying these terms and outlines a path to the holy grail of liquidity.

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Submitted by Timothy J. Keating, Keating Investments, LLC

Entrepreneurs seeking capital to monetize and maximize their enterprise values have always faced a pivotal choice:  either sell out or go public.  Once upon a time in America, the default choice for a venture capitalist or entrepreneur worth his salt was easy:  go for the IPO.  In the last decade or so, however, the table has turned and the IPO has now become the exception rather than the rule.  This choice has profoundly adverse implications for American jobs, growth and ultimately competitiveness.  The stakes couldn’t be higher.  This white paper will argue that the benefits of going public—especially for smaller companies—vastly outweigh the costs and can represent as much as $100 million or more in lost value for a small company.

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By Timothy J. Keating

For many years, the Ivy League has been known for its traditions, its gothic buildings, and, until recently, the mystique of its mammoth-sized endowments that consistently generated incredibly high returns in bull and bear markets alike. Ivy League and other large endowments, weighing in at billions of dollars, were able to achieve these extraordinary results by following what is often called the “Yale Model” for endowments developed by Yale University’s Chief Investment Officer, David Swensen, under which they invested heavily in alternatives such as private equity and hedge funds.  Until very recently, it seemed to some that the Yale Model was invincible.

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