A view of next year: Cold but with a chance of fun
I was skiing on Cannon Mountain the other day. Below is what I saw. This is the time of year when pundits look forward and make predictions. So, I decided to do the same. Here are ten predictions for next year: 1) The Pats will beat the Eagles in the Superbowl 2) Angels will continue to invest at a torrid rate. 3) There will be continued modest improvement in numbers of VC financings (but not enough to get back to 2007 levels). 4) Cleantech and renewable energy start-ups will continue to have difficulty raising venture money. 5) ...
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Optimistic Signs?
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...
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IPOs and the Venture Model
It is a truth universally acknowledged that investors in tech companies get the best exit valuations in IPOs. This has been accepted as axiomatic as long as I have been practicing law. As far as I can tell, when public companies get acquired the buyer usually pays a premium over the public valuation. This premium, often referred to as a control premium, suggests that there is “extra” value in not being public. If companies typically command a premium when control is sold, why are they not valued at a discount when they go public and control becomes diffuse? I can imagine a number of rationalizations...
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No Exit
LogMeIn has now successfully opened trading – the fourth IPO of a venture backed company since RackSpace in August of 2008. Four is better than zero. But if you consider how many there were in 2007 (fifty something, if memory serves me well), we still have a long way to go before there is an IPO market that will sustain the so-called venture model. In the meanwhile, consider a recent article in VentureWire to the effect that there were 137 M&A exits for venture backed companies in the first half of 2009, and – here is the truly alarming news – only 2...
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IPOs of venture backed companies in 2009
As of now there are three: SolarWinds, OpenTable and Medidata. It looks like LogMeIn will make the fourth. Before these you have to go back to RackSpace in August of 2008. Nothing else need be said. ...
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IPOs are coming -- or so I am told
I have just finished reading yet another article on the subject of the impending revival of the IPO market for venture financed companies. I also recently heard a partner in a prominent Massachusetts law firm, explain that the IPO market for venture financed companies was going to “come back” this fall. The recent IPOs of Rosetta Stone and Bridgepoint Education (neither of which was venture financed) seems to have people panting. Oh, yea, and there was a Chinese company that went public on the NASDAQ recently. Hence all the titilting trailers hoping to foment excitement for the movie to be released this fall. There has...
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April bringing signs of life?
In yesterday’s VentureWire there were two articles indicating more signs of life in the entrepreneurial world. One had to do with M&A activity and the other with the NVCA ‘s efforts (such as they are) to bring back IPO activity. Based on my own subjective experience, ther is more postive buzz than there has been for some time. These two articles fit this mode. ...
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IPO Watch
Well the new year is not exactly off to a roaring start. According to VentureWire, it appears that there were two (2) venture backed companies that filed for IPOs in January. They were Medidata Solutions Inc. and Open Table Inc. If this pace keeps up, 2009 will see 24 IPO filings, representing an almost 500% increase over 2008 but still something in the general neighborhood of one-third of 2007. Also, we need to remember that filed and closed are two different things....
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The Turnarounds are Coming
In case you needed another signal that times are tough in the entrepreneurial world VentureWire has published and article entitled Turnaround Firms Busy As Start-Up Woes Mount. The gist of the article is as follows: The number of aging start-ups facing a shortening runway has grown in recent months, these firms say, and some venture capitalists are losing patience with longstanding portfolio companies that have no exit in sight. That's especially true for venture firms with large funds dating back to the tech bubble years of 1999 and 2000 that need to relieve congested portfolios before reaching the traditional 10-year funding...
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More on Funding and M&A and IPO Exits
With reference to IPOs and exits, TechCrunch had the following to say: So far the downward spiral of credit and financial markets seems to have left venture capital firms and startups relatively unharmed. Even though the IPO market closed completely in the second quarter (and opened again only slightly in the third), venture capital firms continue to raise money and invest in startups at a healthy pace. During the first half of the year, venture capital firms raised about $16 billion in 141 funds and invested about $15 billion in nearly 2,000 deals. and this: On top of that, the...
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