The Tech IPO Window Finally Reopens - Woot Woot!

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.

 

VC and Private Equity Fundraising is Very Tough This Year

It's no secret in the world of venture capital and private equity  that it's not easy right now to raise new money to invest in portfolio companies. But at the PEI Investor Relations and Communications Forum last week, I picked up some interesting datapoints from Alexander Leykikh, a partner with Atlantic-Pacific Capital, a placement agent [meaning they raise money for private equity and venture capital funds for a fee]

He said that VCs and PE fund managers had been expecting a 25% reduction in the money committed to their funds by institutional investors, but that in reality, investors are cutting back by more like a 50% reduction. Furthermore, he added that only 75-80% of limited partners (investors) are re-upping.

Dan Primack on peHUB reported some data today about one fund that certainly seems to bear-out this trend. He reported that Polaris Venture Partners, which last raised a $1 billion fund, initially reduced its target for its latest fund to $500 million, but has since lowered it again to $400 million, and according to a regulatory filing, they've only raised $233 million it to date.