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STRATEGY

What Is the Inc. 5000?

The annual list of America's fastest-growing private companies will expand 10-fold, in an attempt to identify even more rising business stars.
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For more than a quarter-century, Inc.'s list of the nation's fastest-growing private companies has been considered a who's who of rising business stars -- and a stamp of approval for the firms that appear on it. Now, Inc. and Inc.com have established the Inc. 5000, in hopes of catching more companies on the way up, while creating a social network for the nation's top entrepreneurs.

By expanding the scope of the list, the goal is to draw attention to the next Microsoft (NASDAQ:MSFT), Domino's Pizza (NYSE:DPZ), Timberland (NYSE:TBL), or E*Trade (NASDAQ:ETFC) -- all former Inc. 500 companies -- and create a database that can be used by customers, vendors, and financiers to study company growth and the entrepreneurial economy in the United States.

"We want to discover, learn about, and draw attention to even more of the private companies that are taking off right now," John Koten, the CEO and editor-in-chief of Mansueto Ventures, which publishes Inc. and Fast Company magazines, said in announcing the list's creation.

All companies that place on the Inc. 5000 will be invited to the Inc. 500 Conference, America's leading conference for entrepreneurs, which will take place in Chicago in September. The top 500 companies on the Inc. 5000 will still be designated the Inc. 500 and be profiled in the magazine, with expanded coverage of all 5,000 companies on Inc.com.

Inc. 500 alumni say that being recognized on the Inc. 500 list has helped strengthen their company's public profile and connected them with their peers and potential investors -- and many expect the Inc. 5000 to do the same for a larger set of blossoming companies.

Jay Uribe, co-founder of Mobius Partners Enterprise Solutions, which ranked No. 127 on the 2006 list, notes that the award is more than just an ego-boost. "It's been a great validation of our growth," he says. "What it's done is gotten more of our branding out there, our name out there, which in turn has gotten us more business."

"You're part of an exclusive club when on the Inc. 500 list," says Michael Szyliowicz, CEO of Mont Blanc Gourmet, No. 58 on the 2006 list. "It gives you credibility which you don't often get from other sources."

Jared Isaacman, CEO of United Bank Card, No. 6 on the 2006 list, says that an appearance on the Inc. 500 list can do for private companies what stock information can do for public ones -- offer hard evidence of success.

"As private companies, we are at somewhat of a disadvantage in the business community because we don't make our financials available," Isaacman says. "We don't have a stock ticker symbol. If we're trying to do business with another entity and they want to do a background check on us, it's not as simple as going on Yahoo Finance and looking up our financials. Since Inc. reviews the financials of thousands of businesses across the country to establish the rankings, being on the list says a company is doing pretty well."

"The list is great for the private investment and Wall Street communities who are looking for promising companies and for private companies who want to sell or go public," says Thomas Hoshko, CEO of The Experts, No. 49 on the 2006 list. He explained that his first company to make the Inc. 500 sold as a result of its appearance on the list. "The company that bought us saw us on the list and knew we were fast-growing and credible."

"Everyone wants to invest in an Inc. 500 company," Szyliowicz adds. "The investment bankers and the venture capitalists come crawling out of the woodwork."

Inc. 500 alumni agree that the award is also valuable because it put them in touch with a community of their peers.

"Inc. 500 companies share some of the same problems and have some of the same successes," Hoshko says. "It helps to share ideas and do some brainstorming with your peers who are going through the same thing, who know what it's like for a company which is growing so fast."

Szyliowicz explains that the networking opportunities afforded by the Inc. 500 Conference can not be underestimated. "It's very interesting being in a situation where you meet all these other entrepreneurs, none of whom have any interest in trying to sell you something," he says. "They want to talk to you about what they've done, what you've done, what's worked or hasn't worked. It's a very open exchange of ideas, which is hard to find."

By expanding the list of America's fastest-growing companies by 10-fold, the Inc. 5000 can highlight the accomplishments of more worthy enterprises and create a larger community of entrepreneurs who can learn from one another.

"The more the merrier," Hoshko says. "There are a number of start-ups who just missed the list that wished they could get that kind of recognition, who would benefit from contact with others in the same stage of their business or from finding a mentor."

"There are a lot of businesses out there," Isaacman adds. "So it's probably actually fair to bring the list up to 5,000. It makes sense given the proportion of small-business owners and private companies in the country."

U.S.-based, independent companies, with four full calendar years of revenue generation, can apply for the Inc. 5000 via an online qualification form, which is available at www.inc.com/inc5000. Inc. and Inc.com are accepting submissions through April 15, 2007.

Last updated: Jan 26, 2007




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