Even a lucrative IPO isn't always what it's cracked up to be. Take the experience of Integrity Media. Ten years after its IPO raised $18 million, the Mobile (Ala.) producer of Christian books, music, and videos decided to go private again this past July.

The turnaround came for several reasons. Soon after Integrity's 1994 IPO, such major labels as BMG Entertainment and Columbia Records entered the Christian music market. And in the late 1990s, the stock market soured on small outfits. Fewer Wall Street analysts followed them, and large institutional investors began to up the ante for their definition of a small-cap.

Then, in 2002, the Sarbanes-Oxley Act brought increased costs and regulatory requirements for all public concerns. So Mike Coleman, Integrity's president and CEO, decided that it should revert to being a private company. Management spent $2 million in the process, buying out shareholders at $6.50 a share, an 82% premium over Integrity's price at the time.

Coleman spoke recently with BusinessWeek Contributing Correspondent Jeremy Quittner about his change of mind and why fast-growing small businesses may be better off without the public markets. Edited excerpts of their conversation follow:

Q: What was your goal for going public in 1994?
A: At the time, our industry was going through a period of consolidation, and we hoped to have opportunities for acquisitions. We were seeing good growth and thought the additional capital would help fuel more. The IPO was mainly about positioning the company for growth and acquisition.

Q: What changed in the decade since?
A: Ten years ago, there were more regional brokerage firms that were independently owned and were able to provide analyst coverage. Since then, there has been a move back to New York, and the [regional firms] have been sold or consolidated. The interest and focus on providing analyst coverage to small companies greatly declined -- and basically disappeared.

When we went public, some institutional investors defined a small-cap as having a market cap of $50 million [Intergrity's was about $20 million to $30 million at the time.] Starting in early 2000, that number was in the $1 billion range.

Q: Did the passage of the Sarbanes-Oxley Act affect your decision?
A: The act was a major factor because the increased compliance costs were enormous. For a company our size, there's an additional cost from between $850,000 to $1 million a year to comply with the new regulations. It was around $500,000 before. We would have had to grow the business about $10 million in sales to pay for government regulations.

Q: Has going private again helped you?
A: It was a long and expensive process, but well worth it. I think it will allow us to focus on running the business. If we were a significantly larger firm and our stock was trading at an appropriate range, staying public would really give value to our shareholders. But regulatory burdens would have been disproportionately hard on us. Being private allows us to save money and focus on running the business as opposed to being a bureaucrats.

Q: Would you advise other small businesses to go public?
A: The environment today is so radically different from the environment when we went public in 1994. If I had to make the decision today, I wouldn't do it. In these post-Enron years you'd have to be a significantly larger company to justify going public. Even then, you need to be able to grow significantly to justify the additional expenses of being public.

There are better ways to raise capital. There are various markets for equity money and mezzanine financing that I think would be better for small firms than the public markets.