Today's Wall Street Journal article about the Silicon Valley start-ups readying themselves to go public signals the reopening -- finally! -- of the IPO "window." It' about time! This has been the longest drought I've experienced since I got to the Valley in 1981, and it was historic by any measure.
The notion of a "window" is that there are good times and bad times to take a company public. It mainly has to do with the receptivity of capital markets investors to new issues by unproven companies. When they are in a buying mood, the window is said to be open, and vice versa.
The window has been all-but closed since about 2002 (it never slams shut, it just gets so small that only the strongest companies can get through, such as Google and more recently, LinkedIn). There was good reason, too -- 2002 was when the dying embers of Internet bubble finally went out, and lots of people were feeling burned and in no mood to buy shares of unproven, unprofitable web 1.0 companies (furniture.com anyone?).
Now, though, memories have faded, the appetite for new issues has returned and a handful of companies such as Splunk, Infoblox, Workday and ServiceNow are getting ready to test the waters.
If this first batch is successful in going public, you can be sure that many more companies will file in a rush to take advantage.
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