How Founders Can Retain Control and Build a $150M–$200M Public Company

This guide expands on the principles outlined in How Going Public Helps Founders Grow Through Acquisition by diving deeper into one of the most powerful — and often misunderstood — advantages of becoming a public company: equity retention while scaling through acquisitions.

If you’re a founder who wants to build something big — but also keep what you build — this playbook shows how it’s possible to retain control and grow a company to a $150M–$200M valuation without handing over your cap table to outside investors.

The Traditional Path vs. Public Company Strategy

Most founders who want to scale through acquisition take a predictable path:

• Raise capital from private equity or venture capital firms
• Trade control and ownership for funding
• Use that capital to grow — but at the cost of long-term upside

Many entrepreneurship-through-acquisition (ETA) playbooks rely heavily on SBA loans to finance deals:

• Capped at $5 million per borrower
• Require personal guarantees
• Often have fully amortized 5- to 10-year terms, meaning much of the acquired company’s free cash flow goes toward principal and interest — leaving little for scaling, owner compensation, or reinvestment

Compounding this, many entrepreneurs lack sufficient equity to secure those loans. As a result, they raise capital from their networks at the same valuation as the purchase price — often giving up even more equity than they intended because investors demand a premium for early risk.

By contrast, a public company structure enables founders to:

• Attract better acquisition opportunities
• Secure flexible, non-dilutive financing
• Offer equity-based compensation to retain talent
• Achieve higher valuation multiples
• Keep 70%+ of their equity in the process (depending on the size of the business and transaction specifics)

This guide breaks down how.

Starting Point: A Realistic Founder Scenario

• A founder owns 100% of a small but profitable company
• EBITDA: $500,000
• Private market value: $1.5M–$2M (3x–4x EBITDA)

Wall Street may consider this a "boring" business — but it’s often the perfect foundation for a public listing and rollup strategy. These companies generate real cash flow, operate in fragmented industries, and are often overlooked by VCs and too small for traditional PE firms.

Ideally, the entrepreneur already owns and operates this kind of company. But we’ve also worked with founders at pre-incorporation who had the right experience, mindset, and access to capital to acquire their first business quickly.

Step 1: Retain a Strategic Advisor and Prepare to Go Public

• Issue 10% equity to an experienced advisor who helps structure the public listing and rollup strategy

This isn’t a true cost — it’s a multiplier. You’re trading a percentage of your company in exchange for significantly expanding its long-term value. If the advisor helps increase your company’s valuation by 2x, 3x, or 10x, your remaining shares are worth dramatically more than they would’ve been otherwise. That 10% can vary slightly — more or less — depending on the size and complexity of your business when we’re engaged.

• Complete a $1M private placement by raising capital from personal and professional networks (no institutional funding)

This capital covers:

• Legal and audit costs for going public
• Public listing qualification (via direct listing or reverse merger)
• Initial M&A execution budget

Post-Transaction Cap Table (Example Only):

• Founder: 70%
• Advisor: 10%
• Private Investors: 20%

Percentages will vary depending on starting valuation, private placement size, and deal structure.

Step 2: Go Public and Execute the Rollup Strategy

The company becomes publicly traded through a direct listing or reverse merger. With public status:

• Brokers bring more acquisition opportunities
• Sellers are more willing to negotiate favorable terms
• Deals can be financed through:
• Non-convertible preferred shares
• Warrants
• Seller notes
• Deferred cash
• SPVs or affiliate vehicles
• Traditional bank debt (often without personal guarantees)

Most businesses acquired in this strategy trade for under 4x earnings, creating an arbitrage opportunity when those earnings are added to a public platform.

Step 3: Scale Over Time With Greater Efficiency

Over 7 years, the company makes multiple profitable acquisitions and scales to $10M in EBITDA.

As a private company, this might yield:

• $30M–$40M valuation (3x–4x EBITDA)

As a public company:

• 15x–20x multiples are typical — even in basic industries
• That equates to $150M–$200M in market value

The difference: up to $160M in additional equity value created solely by using public infrastructure and a disciplined acquisition model.

Step 4: The Founder Still Owns the Majority (and the Upside)

With ~70% ownership in this model example:

• The founder controls $105M–$140M in equity
• No PE firm took 50%+ of the upside
• No need to raise large dilutive rounds

And because public structure attracts better people, capital, and deal flow — the probability of achieving that outcome is significantly higher.

Going public doesn’t just increase your potential upside — it improves your odds of achieving it:

• Better access to capital (on better terms)
• Stronger ability to recruit top talent and executives
• Greater trust from brokers, lenders, and sellers

You move faster, build smarter, and retain more of what you create.

Step 5: Why Public Rollups Work (Reinforced in Different Words)

The playbook succeeds not just because of the valuation math — but because the structure itself enhances your execution power:

• Public companies are more trusted by brokers and sellers, opening more doors and speeding up closings
• Capital partners offer better terms when there's transparency, reporting, and liquidity
• Public equity attracts better talent who are motivated by upside they can track and trade
• Sellers are more open to flexible deal structures (preferred shares, earn-outs, SPVs) that keep you in control

The combination of transparency, trust, and capital efficiency creates a feedback loop. Each successful deal makes the next one easier, faster, and more valuable.

This is how public structure turns smart entrepreneurs into elite operators.

Step 6: What Comes Next?

As a public company, you’re no longer building for a one-time exit — you’re building optionality:

You could:

• Sell the business to a larger public company or PE-backed consolidator
• Step away and install professional management while remaining a major shareholder
• Continue scaling — often faster and with less friction than ever before
• Borrow against shares instead of selling them — allowing you to enjoy your success without giving up future upside

Many entrepreneurs start this journey thinking they’ll sell if they hit $100M in valuation. But by the time they reach that milestone, they realize the hardest part is behind them — and that continued growth is both easier and more lucrative than they imagined.

Going public gives you leverage, liquidity, and long-term flexibility.

You can have your cake — and keep eating it.

Want to Explore If This Could Work for You?

If you’re ready to explore what this path might look like — or whether it makes sense at all — We’d be happy to help.

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