How to Access Financial Information on Private US Companies

As a CEO of a growing company, ensuring access to reliable and accurate financial information is crucial. This is particularly challenging when dealing with private US companies, where financial transparency is often limited. In this article, we will explore the different avenues and strategies available to obtain financial information on private US companies. Regardless of the project's value or time sensitivity, finding this information can be a complex process.

A Valuable Yet Challenging Journey

As the CEO of a large entity that has grown from one to a family of 30 private companies, you have made the strategic choice to keep your financial information private. You share only earnings with the taxing authorities and do not release financial statements to the public. With full ownership and control, you have the liberty to make such decisions. However, this also means that accessing financial information can be a significant challenge, requiring a tailored approach depending on the context and your specific goals.

Costs and Valid Reasons

Free information is often available, but it comes with a hidden cost. The value you gain from accessing this information can be offset by the resources you dedicate to it. If your project is valuable or time-sensitive, you may not have the luxury of seeking free alternatives and may need to invest in paid subscriptions. Conversely, if your project is a hobby, you can explore credit rating agencies, which usually provide access to data but at the expense of your time and effort to understand the systems and work within their frameworks.

Limited Public Resources

It is important to understand that there is no comprehensive data repository for financial statements of private US companies due to their privacy. One viable option is to subscribe to online services that provide benchmarking data for specific industries. These services include:

While these platforms offer benchmarking data, it is only macro-level information and not exact financial statements. For a more accurate picture, membership in industry associations that report financial data for annual benchmarking surveys can be invaluable.

Government and Public Records

Other sources of information include:

1. Publicly Traded Debt: If the company has publicly traded debt, you can find information on the EDGAR SEC database.

2. Dun Bradstreet: This credit rating agency offers a complete audited report for a fee of about $500, which is only available for companies that choose to provide their statements to support their credit ratings. These reports typically include companies working internationally.

3. Government Contracts: FOIA (Freedom of Information Act) requests for companies holding government contracts, whether state or federal, can reveal financial information as part of the original Request for Proposal (RFP).

4. Court Documents: Court records can sometimes contain relevant financial information, but access is contingent on the case's relevance and the records' availability.

Estimating and Making Informed Decisions

With limited direct access to financial information, making reasonable estimates based on available public data and insider knowledge is essential. While precise financial statements may be out of reach, these estimates can provide valuable insights. Additional research can enhance accuracy but ultimately, these will remain estimates.

It is also important to consider the real value in requesting financial statements. Alternative methods, such as direct communication with the CEO to sign an NDA and gain access, should be considered. However, this approach carries low probability and potential risks. Always evaluate the potential benefits against these risks.

In conclusion, accessing financial information on private US companies is a complex but achievable task. By understanding the limitations and exploring various sources, you can make informed decisions and achieve your business objectives.