Hitting Bottom
The NVCA reports:
There were no venture-backed IPOs in the first quarter of 2009, marking the second consecutive quarter in which there were no issues. Since data has been recorded, there are no other incidences of two quarters without a venture-backed offering. Furthermore, no companies that received US venture financing went public on foreign exchanges in the first quarter.
Twenty-six venture-backed companies are currently filed for an initial public offering with the SEC. This level falls short of 4Q 2008 when 28 venture-backed companies were in registration. Additionally, there were six venture-backed IPOs withdrawn from registration in the first quarter.
"We predicted that the venture-backed IPO market was going to get worse before it was going to get better, and we were unfortunately correct," said Mark Heesen, president of the NVCA. "Today our concerns are not limited to the zero IPO issues but have now expanded to the shrinking pipeline of companies in registration. Once we begin to see a recovery, there won't be many companies prepared to take advantage of it, effectively extending the lackluster market until the pipeline rebuilds."
Comments
You might have seen this ... http://www.businessinsider.com/chart-of-the-day-the-second-straight-quarter-without-a-venture-backed-ipo-2009-4
... good support for your comments the other day.
Posted by: Andrew Fern | April 6, 2009 08:13 AM
The report sounds like the NVCA is desperately trying to validate its importance by claiming they predicted this, when all they did was look at the same information that everyone else already had.
According to Sun Tzu, if the NVCA truly had this power of prediction they would be victorious without erring. Here is the quote from Sun Tzu.
To foresee a victory which the ordinary man can foresee is not the acme of excellence. Neither is it if you triumph in battle and are universally acclaimed "expert," for to lift an autumn down requires no great strength, to distinguish between the sun and moon is no test of vision, to hear the thunderclap is no indication of acute hearing. In ancient times, those called skilled in war conquered an enemy easily conquered. And, therefore, the victories won by a master of war gain him neither reputation for wisdom nor merit for courage; for he wins his victories without erring. Without erring he establishes the certainty of his victory; he conquers an enemy already defeated. Therefore, the skillful commander takes up a position in which he cannot be defeated and misses no opportunity to overcome his enemy. Thus, a victorious army always seeks battle after his plans indicate that victory is possible under them, whereas an army destined to defeat fights in the hope of winning but without any planning. Those skilled in war cultivate their policies and strictly adhere to the laws and regulations. Thus, it is in their power to control success.
Posted by: Matthew Artero | April 8, 2009 05:22 PM
Claire Cain Miller reports in the NYT yesterday: Venture Capitalists' Confidence Creeps Back.
This seems bizarre, like when Eubonics was to become a field of study. Only in California! No, I don't know what they're smoking.
http://bits.blogs.nytimes.com/2009/04/08/venture-capitalists-confidence-creeps-back/?dbk
Posted by: Frank | April 9, 2009 01:21 PM
According to Confucius we know exactly what they are smoking. Confucius said you only have to look at how one makes their money to know everything you need to know about that person.
VCs are salespeople. They sell a dream, similar to what religions, the lottery, and politicians do. They don't sell their track record. VC's need people to give them their money and pay them to manage it win or lose. They get paid too much for the losses and therefore are not incentivised well enough to win.
My reaction to the article is not "what are they smoking"; but rather a comment on the NYT and reporter, "why is this news?" It's like going to a car dealer and asking him to tell you which is the best car.
The great success of VCs is that they have convinced the world to not look at them as the overpaid salespeople that they are.
Posted by: Matthew Artero | April 10, 2009 03:49 PM