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Continued: The Star Tribune 100: This year, it's a top-heavy list

“There’s less angel and venture financing going into companies now than there was 10 or 15 years ago in the Upper Midwest,” Tunheim said.

Silver lining?

The dip in IPO activity should be good for smaller public companies, said Fred Martin, president of Disciplined Growth Investors. When lots of firms in similar industries are going public at the same time, they tend to fight with each other to the death. “When IPO activity is high, the small guys eat themselves,” he said. “You send 10 soldiers up the hill and nine die.”

As IPOs drop off, smaller public firms have less competition and should benefit. Another thing working in their favor has been, counterintuitively, the economic downturn, Martin said. Lean times force large companies to abandon peripheral business lines, meaning still less competition in some markets.

“When economic times are tough, big companies focus on their core competencies, and they stop this nonsense of going after hopeful markets,” Martin said.

Chris Puto, dean of the University of St. Thomas’ Opus College of Business, said he’s encouraged by the numbers he sees on the Star Tribune 100 index. The economic recovery has been unsteady, but revenue is growing overall and companies deep in the ranks are posting double-digit gains.

“The reason our state is doing well,” he said, “is because these companies are doing well.”


Adam Belz • 612-673-4405

Patrick Kennedy • 612-673-7926

Twitter: @adambelz • @pkennedystrib

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