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updated 12/22/2011 7:49:05 AM ET 2011-12-22T12:49:05

What if someone told you the most promising company in America aimed to compete with multiple multibillion-dollar giants in a traditional industry with un-software-like profit margins? Then what if they told you that the same company had clocked explosive growth through the deepest recession in recent memory — and it was just getting started?

Meet Smashburger, tops on our new list of America’s 100 Most Promising Companies — privately held up-and-comers with compelling business models, strong management teams, notable customers, strategic partners and precious investment capital. Since 2007, the Denver-headquartered patty chain will have grown to 143 locations (half company-owned, half franchised) and $54 million in annual revenue by the end of 2011. Another 450 franchise agreements are already on the books.

Forbes.com slideshow: See which companies made the ranking

The companies on our AMPC list hail from 22 industries, with software-and-services taking the biggest slice (35 percent). Some fast facts: 90 have raised outside capital; 70 have a CEO who is also one of the founders; 12 have one younger than 35 years old; 7 have yet to generate revenue; and one sells a burger topped with pastrami. None of these outfits may blossom into the next Google or Apple, but all, it appears, have bright futures.

Take BOKU, at No. 2. Founded in 2008, the company (fiscal 2010 sales: $55 million) creates software that helps online merchants process payments using a customer’s cell phone number in place of a credit card; it then takes a small cut of each transaction. Big customers include Facebook and Electronic Arts. BOKU has raised $42 million in venture capital from stalwarts Andreesen Horowitz, Khosla Ventures and others. Founders Mark Britto, Ron Hirson and Erich Ringewald have each sold companies they founded or lead.

Digital Broadcasting Group, at No. 3, launched in 2006. It produces online videos — marketing disguised as entertainment — for corporations and places them (as well as traditional video ads) among a network of 2,600 websites. Customers include Wal-Mart Stores, American Express, Coca-Cola and Ford. CEO Chris Young sold KlipMart, an online video ad company, to Doubleclick in 2006.

Those are the kind of ingredients promising companies are made of — which leads us to the point of this whole exercise.

You’d have to be living under the dirt that’s under the rock not to have noticed that the business press loves rankings. Readers devour, dissect and debate them. More to the point, rankings sell advertising — and that leads to more rankings.

Company rankings are a popular confection, if often an ultimately unsatisfying one. That’s because most are based on a single metric (such as revenue, assets or market capitalization) and don’t take a comprehensive approach to evaluating a business’ health — or more importantly, its potential.

Sizing up younger, privately held firms is even harder. Their fortunes can change very quickly, and they aren’t obliged to share their plans and finances with the public. The default: Cajole as many companies as possible into revealing their annual sales figures and stack them accordingly.

These short cuts are understandable given the effort, resources and skill deeper due diligence requires — not to mention the abiding fascination with rankings, however unenlightening they might be.

How, then, to find hidden gems with scintillating prospects?

To sharpen our search, FORBES teamed up with CB Insights, a New York City-based data firm that tracks investment in high-growth private companies. With $650,000 in grants from the National Science Foundation, CB Insights has developed complex software called Mosaic to help lenders and investors dole out capital more efficiently. We married Mosaic’s data-crunching with old-fashioned reporting to assemble a list of up-and-comers with big growth potential.

Mosaic mines data from 30,000 sources (from press releases and social networks to job boards and court filings) to come up with one score that measures a company’s potential. Think of it as the SAT score for private companies — something that lenders, investors and vendors can use to quickly gauge whom they want to do business with. “Five years from now we expect Mosaic will help the best private companies access capital at more favorable terms and win more customers,” says CB Insights cofounder Anand Sanwal, 38.

Mosaic’s algorithms look at a host of signals that collectively paint a picture of a company’s health. Example: If turnover in the management ranks is ticking up, that’s a negative signal. A new distribution deal with a large strategic partner is a favorable signal. The hard part: extracting all those “digital footprints” (job postings, product reviews, press reports, debt filings — all in different digital formats) and assembling them in a meaningful way.

There are two powerful advantages to this approach. First, aggregating data from thousands of sources would take far too long to do by hand. Second: “Mosaic assesses these dimensions not just on an absolute basis but relative to competitors,” adds Sanwal. “It implicitly considers relative performance.”

Our hunt began with a free online survey. Entrepreneurs could nominate their own companies or be nominated by those familiar with their businesses (lawyers, accountants, p.r. types). Contenders had to be privately held, for-profit, stand-alone businesses (as opposed to divisions of bigger firms). Companies that hadn’t yet generated revenue but had compelling business models were given a look, too.

(To encourage participation, we offered contenders the chance to be selected to attend a two-and-a-half day small business boot camp at Aileron, in Dayton, Ohio, established by billionaire pet food titan Clay Mathile. Scroll down to the Video section of the America’s Most Promising Companies lander page to see Mathile conduct one-on-one mentoring sessions with four AMPC list members. Click here for highlights from our own 90-minute chat with Mathile.)

Using the Mosaic score as a preliminary ranking, we honed the list by gathering additional data via a second, more detailed survey (also free) to get a better sense of each company’s growth potential. We asked for annual revenue and the number of employees for 2008 and 2010, and estimates for 2011. (Companies had to verify existing revenue via a corporate tax return or an accounting opinion letter from an independent accounting firm.) We also took into account the size of the addressable market, the strength of major competitors, the experience of the management team, any significant customers and strategic partnerships, the amount of outside capital raised and how much of the founders’ own stash was on the line (the more the better). Then we spoke with representatives of each company to confirm the information and get additional color on their operations.

Our ranking of 100 promising companies is chocked with interesting outfits poised to take off. Here are a few more names and nuggets from the Top 20:

No. 7 — Allonhill
Annual revenue (latest fiscal year): $19.3 million

Founded in 2008, the company audits individual residential mortgage loan files for institutions that buy or sell mortgage-backed securities. Everything from the borrower’s income and property value to the authenticity of signatures gets a look from one of Allonhill’s 530 employees. Founder and CEO Sue Allon funded the company with proceeds from the sale of her last company, Murrayhill, which also managed risk for mortgage securities, in 2004.

No. 11 — uSamp
Annual revenue (latest fiscal year): $22.7 million

Founded in 2008, the company makes online-survey software and has a network of 6.5 million respondents globally in its stable. The company charges according to the number and demographics of the respondents. J.D. Power & Associates is a marquee customer. Co-founders Gregg Lavin and Matt Dusig are childhood friends who together launched and sold two previous companies. They raised $10 million in venture capital from Openview Partners in 2010.

No. 14 — Contour
Annual revenue (latest fiscal year): $15.1 million

Makes small, rugged cameras that athletes attach to their helmets or bodies for hands-free recording. Each camera comes with free video editing software; other features include a Bluetooth connection that turns a user’s mobile phone into a viewfinder. Sells through Best Buy and Dick’s Sporting Goods. Marc Barros and Jason Green started the company in 2003 after winning $20,000 at an undergraduate business plan competition. They raised $5 million from Montlake Capital and Black Oak Capital in November 2010.

No. 19 — IntegriChain
Annual revenue (latest fiscal year): $5.7 million

Founded in 2007, the company makes software for pharmaceutical companies looking for a better window into their “forward supply chains” — that is, sales and inventory data from distributors and local pharmacies. (Say you wanted to tally the inventory at a single pharmacy, or even see the number of units that pharmacy sold on any given day.) Clients — including Novartis, Johnson & Johnson, and GlaxoSmithKline — sign three- to five-year contracts for access to IntegriChain’s dashboard which can display data myriad ways to make sales teams more efficient. The company raised $3.25 million in venture capital in early 2011.

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© 2012 Forbes.com

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