Tag Archives: IPO

2009 Venture-Backed IPO!

It is bound to happen eventually, right? A venture-backed company will break the drought and find an exit via IPO. Well, OpenTable filed with the SEC and is looking to raise up to $40MM in an initial public offering. If successful, OpenTable will be the first venture-backed IPO in several months.

There were only 6 venture-backed IPOs in 2008 and the common thought is that 2009 won’t do much better. So an early 2009 venture-backed IPO could bode well…but of course registering for an IPO doesn’t always mean the IPO goes through. At least 36 venture-backed companies cancelled their IPO plans in 2008.

As for OpenTable, I remember using its online restaurant reservation system in 2000 while living in San Francisco. Who knew I was an early adopter?

Stay Ready in 2009

A wise man from Pomona once said “If you stay ready, you ain’t got to get ready.”

That’s the approach we should all take in 2009. Sure, venture-backed IPOs are rarer than brush-tailed rock-wallabies and capital is tighter than a 19th century corset. But that’s no excuse to be passive in 2009. If we aren’t ready, opportunity will pass us by.

Thus, one way I’m trying to stay ready in 2009 is by turning my law office into a “law lab” in order to increase productivity. I got rid of all the heavy furniture and replaced it with a contemporary/minimalist set from IKEA. (It was a no brainer since my desk was giving me ergonomic fits.) I also became more mobile by switching from a desktop to a laptop.

The following list are a few things entrepreneurs can do to “stay ready” in 2009:

1) If you are running a startup as a sole proprietorship or general partnership, incorporate your startup.

2) If your startup has incorporated, but has not executed various corporate agreements like bylaws, draft those now.

3) If you had a co-founder leave your startup, figure out the equity situation now. Don’t wait until it’s time to raise capital or sell. It will be too late.

4) If you recently left a startup and/or plan to launch a new startup, make sure you aren’t subject to any restrictive covenants.

5) If you are about to hire someone or team up with someone on a startup, make sure they aren’t subject to any restrictive covenants.

Here’s to a 2009 filled with opportunity for us all.

Zero IPOs for Venture Backed Companies in 2Q 2008

Anyone else concerned about the lack of any IPO “exits” for venture-backed companies this quarter?. In fact, there weren’t any IPO exits this quarter which apparently hasn’t happened in 30 years. I decided to join the discussion and my comment trying to explain the lack of IPO exits is re-published below:

Like the article suggests, there are a couple different factors for the zilch IPO exits in 2Q 2008. 3 reasons for the lack of IPO exits (besides SOX stuff) are:

(1) Recent IPO exits have not done well – I think the statistic I remember from a couple months ago (NVCA presentation) was that only 28% of IPO exits (from 2007?) were trading above their IPO price.

(2) Cleantech/greentech takes a long time – Although keep in mind this, while a hot field, only comprises about 10% of funding. So there’s a bunch of capital going here the past 2 years (3.5B) that isn’t looking to exit anytime soon.

(3) Natural VC pattern – The number of first time fundings has increased every year since 2003, with 2007 being the best year post-bubble. Maybe the industry is just stuck between the not-a-lot-funded exit time/a-lot-funded early stage time?

It’s also worthwhile to look at the M&A exits, considering they have outnumbered IPO exits a little greater than 4:1 since 2004. While some of these exits were “fire sales” the quality of these exits is increasing every year. For first fundings from 1991 to 2000, M&A exists outpaced IPOs by a little more than 2:1. Currently, M&A exits are having a slow go of things. But there were still 56 M&A exits in Q1 2008.