GrowthEconomy.org Launched by ACG and Edward Lowe Foundation

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Data reveal that private-capital backed middle-market companies drive exceptional growth

“For the first time, GrowthEconomy.org makes visible the impact of private capital investment in the U.S. economy,” said Andrew L. Rice, senior vice president, international, The Jordan Company and ACG Chairman of the Board.

The Association for Corporate Growth® (ACG), the global organization focused on driving middle-market growth, announced the launch of GrowthEconomy.org, a web site that provides visitors with data comparing the sales and job growth of private capital-backed companies versus the U.S. economy.

“For the first time, GrowthEconomy.org makes visible the impact of private capital investment in the U.S. economy,” said Andrew L. Rice, senior vice president, international, The Jordan Company and ACG Chairman of the Board. “The data reveal that private-capital backed middle market companies outperform other companies on sales, which drives employment growth.”

GrowthEconomy.org combines two independent databases: PitchBook’s directory of over 16,500 private capital backed companies and the National Establishment Time Series (NETS). The NETS database includes more than 44.2 million records for U.S. business establishments. Derived from Dun & Bradstreet records, NETS is compiled annually by Walls and Associates and has been used in dozens of peer-reviewed academic studies and for projects sponsored by the National Governors Association, National Bureau of Economic Research and the National League of Cities.

By combining the databases, GrowthEconomy allows users to compare the performance of private capital-backed companies to the general U.S. economy from 1995 to 2009 by all 50 U.S. states and 366 Metropolitan Statistical Areas (MSAs). Searches on GrowthEconomy.org are dynamically produced by the user’s custom search parameters. Additional data for 2010 will be added by September 2012.

The Edward Lowe Foundation’s Institute for Exceptional Growth Companies contributed access to the NETS database for the project. Access to the PitchBook dataset is made possible through a strategic relationship between PitchBook and ACG. The GrowthEconomy.org web site is powered by a web site built and maintained by the Edward Lowe Foundation in collaboration with ACG. Conceived of more than two years ago, the site has been under development since last June. The goal of GrowthEconomy.org is to empower users to learn more about the impact of private capital-backed companies on the U.S. economy.

“The data clearly show that middle-market companies are the engines of sales and job growth,” said Mark Lange, executive director, Edward Lowe Foundation. “And companies with between 10 and 500 employees add more net new jobs than any other stage.”

The locations of the 16,500 private-capital backed companies included in the database are also displayed on the website. “GrowthEconomy spotlights an often overlooked fact: private capital backed companies are everywhere, supporting local businesses and helping to grow local communities,” said Gary A. LaBranche, FASAE, CAE, president and CEO of ACG. “Private capital invests in companies on Main Street, touching the lives of millions of Americans.”

Looking at the broadest possible sampling (1995-2009), highlights from the data reveal:

  •     Private capital-backed companies grew jobs by 81.5%, while all other companies in the U.S. economy grew jobs by 11.7%
  •     Private capital-backed companies grew sales by 132.8%, while all other companies in the U.S. economy grew sales by 28.0%
  •     Middle-market private capital-backed companies created more than twice the amount of new jobs (339,909) than any other employment stage
  •     Private capital-backed companies had more annual relative growth every year except one compared to the general U.S. economy

The Edward Lowe Foundation’s Institute for Exceptional Growth Companies welcomes proposals for deeper scholarly research on the data. The Institute has approved projects from scholars at 13 colleges and universities, including Harvard Business School, New York University, Pepperdine University, University of Michigan and Imperial College of London.

For more information, please visit GrowthEconomy.org.

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About Association for Corporate Growth
ACG’s 14,000 members include professionals from private equity firms, corporations and lenders that invest in middle-market companies, as well as from law, accounting, investment banking and other firms that provide advisory services. Founded in 1954, ACG is a global organization with 57 chapters. Learn more at http://www.acg.org. ACG drives middle market growth. Learn how at http://www.middlemarketgrowth.org.

About The Edward Lowe Foundation & Institute for Exceptional Growth Companies
Established in 1985, the Edward Lowe Foundation is a national, nonprofit organization that supports entrepreneurship through research, recognition and educational programs, which are delivered through entrepreneur support organizations. The foundation focuses on second-stage companies — those that have moved beyond the startup phase and seek significant, steady growth. It also encourages economic gardening, an entrepreneur-centered strategy that provides balance to the traditional approach of business recruitment.

About the Institute for Exceptional Growth Companies
The IEGC was created by the Edward Lowe Foundation in 2011 through a three-year grant from the NASDAQ Educational Foundation. IEGC is creating new data sets and using existing data in innovative ways to track and better understand exceptional growth companies, their impact on community and economic development, and their relationship with equity funding sources.

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Christine Melendes
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