Josh Hug is only 29, and the Seattle-based Social-networking tech company he heads, Shelfari, is barely more than a year old. But Hug has already formed some strong opinions of what a desirable exit might look like. After he spent seven years watching the travails of his publicly traded previous employer, Real-Networks, visions of an initial public offering are not exactly dancing in Hug's head.

"If your company isn't churning out cash, it's a complete pain," Hug says of being a public company. "Personally, I don't think I want to be the CEO of a public company. I wouldn't want to have to deal with the reporting mess."

Hug's thoughts echo those of many other local entrepreneurs whose startups have received recent venture capital infusions, and who might have been driving toward an IPO back in the go-go days circa 2000. Now, IPOs have gone out of style for various reasons: uncertainty over whether today's volatile markets will provide investors with the best payoff; acquisition-hungry companies that snapped up $1 billion worth of venture-backed Washington state companies in 2006 alone, according to Dow Jones Venture-One; the current cycle of private-equity buyouts; and the increased effort and cost required of public companies by the Sarbanes Oxley Act of 2002.

Regional economist Dick Conway says our state economy has been healthy, particularly in sectors that tend to favor IPOs, such as biotech and software. But IPOs won't likely regain their popularity here until some of those national trends change say, the current merger and private-equity boom ends, or regulatory reform makes being publicly traded less expensive, particularly for smaller companies.

At Wilson Sonsini Goodrich in Seattle, which represents many IPO issuers and underwriters, attorney Patrick Schultheis says he's not optimistic the Securities and Exchange Commission will heed pleas that regulations be eased for small-caps.

He expects that instead, we'll see more companies go the way of Prometheus Energy, a Bellevue-based startup that went public in 2006 on the less costly, London-based Alternative Investment Market.

Even if they'd like to go public in the U.S. and could afford the several million in annual costs typically involved, many smaller companies might have trouble finding independent directors willing to shoulder the required personal liability risk, says Chad Waite, managing director of OVP Venture Partners in Kirkland.

"In 1998, I sat on six public-company boards," Waite says. "I have not sat on one since, and I have no desire to in the future. As long as Sarbanes-Oxley is in force in its current configuration, there is no incentive for a small company to go public at all."

As things are, entrepreneurs like Hug say, why be like tech company Isilon Systems  which last year went public, only to lose nearly 80 percent of its value after results disappointed  when you can be like spa chain Gene Juarez, quietly bought by local private equity firm Evergreen Pacific Partners in 2006 without even having to disclose the purchase price?

Once, the answer would have been, because an IPO is the brass ring, the public anointing of your company as an official success. These days, though, Shelfari's Hug says, most of his colleagues daydream about being another YouTube, referring to that garage startup's $1.65 billion sale in 2006 to Google.

"An IPO is not as glamorous as it used to be," says Ben Elowitz, a cofounder of Internet-diamond success Blue Nile, who's now CEO of wiki-provider WetPaint in Seattle. "You don't want to enter the markets too quickly, either. Blue Nile entered at a later stage."

The lukewarm track record of our state's IPO crop since 2002 hasn't made IPOs look enticing. As of Jan. 2, only four of the 16 local companies that went public since the dotcom heyday have shares trading higher now than they were at their IPO, led by Blue Nile. Nine were down from their IPO, seven of them substantially, including Isilon and scandal-plagued bank holding company WSB Financial. (Two companies are no longer publicly traded  Xcyte Therapies was sold off in pieces in 2005, and Quinton Cardiology Systems merged with a rival that same year.)