VentureWire had this to say yesterday:
A perceived opening of the IPO markets is the focus of most of investors' optimism. There were two venture-backed IPOs in the quarter, A123 Systems Inc. and LogMeIn Inc., one fewer than the last quarter.
Public-offering activity is not expected to pick up quickly because of the "time it takes to run the SEC gauntlet," Ward said. However, a small number of successful offerings from companies like Ancestry.com Inc. and Fortinet Inc. - a Meritech portfolio company - could "set the table in the fourth quarter for what should be a good 2010."
The two IPOs from the third quarter raised a total $460.4 million, up from $232.1 million last quarter.
With successful recent offerings from companies like LogMeIn, OpenTable Inc. and SolarWinds Inc., public investors are showing a healthy appetite for small-cap technology stocks.
Unfortunately, they also had this to say about acquisitions:
The third quarter saw 71 acquisitions, seven fewer than the second quarter and 13 fewer than the same quarter a year ago. Nine of the companies sold were in life sciences with a combined value of $186.2 million, down from $324 million in the previous quarter and $864.7 million in the year-ago quarter. Combined with the absence of any health care companies going public, it made for one of the worst periods for health care liquidity in recent memory.
The venture economy (and the rest of the economy -- I think) has been suffering from the acute pain of the Great Recession. As it goes away, we will find out if there are other problems that were masked by the recession. If there are not, it does seem as though we should see a return to IPO and M&A exists that will bring back an appetite for investment.