Why should a tech company consider selling part of its business to a buyout firm?
Mr. Barnds: It’s a tough time to be a small public company. You have $2 to $5 million in incremental costs related to Sarbanes Oxley. So there are some costs you can eliminate by going private. Also, if you’re a company that needs to undergo some transformation, you can make that transition out of the public light… And lastly, those closely-held private companies that many times are founder-run with a small group of investors — we can provide liquidity for folks where they might not otherwise have a path to liquidity because of the size you need to get to become a public company today. Q: Buyout firms have been raising record amounts of capital in the last couple of years — perhaps more than they raised throughout the entire 1990s. What’s going on here? Mr. Barnds: Sarbanes Oxley is certainly contributing to the going-private trend. I don’t know that that can be underestimated. When you’re actually talking to CEOs and board members of public companies, there’s frustration in how so
