This raises the question, what should CEOs and early-stage VCs do, once a company has reached $100 M+ in annual sales? (Below this threshhold, it is absolutely undesirable to go public; investor courting, ongoing investor management, Sarbanes-Oaxley compliance related paperwork and massive expenses - being some key distractors ...)

In general, by year 5 or year 6 in a company's history, the Series A investors, the Founders, and the early executive team that is still around - get itchy to extract some liquidity. Today, given the sophistication, the available money, and the level of activity in the Private Equity industry, a late-stage / LBO fund could easily step in and provide the necessary liquidity.

Liquidity, I believe, is no reason to go public prematurely. An enterprise that has built-in scalability should stay private, stay on course, and execute, execute, execute. If, however, the business does NOT have built-in scalability - and most don't - they should absolutely NEVER go public. They should get acquired, and become part of a larger portfolio.

Last year, 41 start-ups backed by venture-capital investors became publicly traded U.S. companies, down from 67 in 2004 and 250 in the boom year of 1999, according to research firm VentureOne.

I would say, the recent numbers are much closer to what they should be.

After all, how many enterprises really have built-in scalability in their business model?

Most companies simply go public and then struggle, giving smart investors absolutely no reason to touch them, and hence, giving analysts no incentive to cover them!

Rather, a secondary exit market for private placements of a chunk of the company's shares held by early shareholders - is a far better alternative.