The drought has officially ended. While many of you may have thought I had been on vacation for months, a fugitive from the innovation law, still recovering from my Celtics winning the NBA championship or "gee another blogger who starts fast and fades like the French swimming relay team anchor" but I have been waiting to blog for a reason. My last blog was about little to no venture-backed IPO's in the US this year; so I thought I would wait and blog when the next IPO went to market. Hence, I waited, waited, and waited.
The wait is now over. Rackspace went public last week; the first venture backed IPO since Cardionet on March 19th; first technology IPO since Valentine's Day ish (sorry Hallmark).
So does this mean the flood of IPOS will begin now? Will the "pearly gates of liquidity" open freely? Some thoughts:
1. No
2. Rackspace is a company with size $300+MM in revenues and profits. It also has been around awhile and has a model of hardware and services that makes sense. Will it commoditized soon? maybe, but for now it's the best we got.
3. One of the uniqueness of my job at OCTANe is to hear "what is going on in the trenches and on the street" .. from hi-tech to biomedical to clean tech. Softness in consumer technology started mid last year, consumer oriented medical products within the first half of this year, clean tech? .. still sexy and getting money like women's based reality shows. (question is what will last?).
4. Early stage money is still not flowing in earnest, but you HAVE to consider this as an opportunity for asset allocation advantages now that the bloom is off real estate (my 2 cents .. another 12 months of real estate weakness for you investors).
5. Now for the good news, for you entrepreneurs and the community, innovation driven businesses that solve real problems are getting funded and I think, always will. During times of softness, focus on the science, the technology and develop value in the business. You can not predict or time the end game, just create value and ultimately you will be rewarded.
So, I am back to blogging on my semi-regular basis. Out.
Gary
Showing posts with label IPO. Show all posts
Showing posts with label IPO. Show all posts
Tuesday, August 12, 2008
Tuesday, June 3, 2008
Quiz time: The last venture-backed IPO in 2008 was when? How many in 2008 YTD?
I was reading the daily Venture Wire blurb last Friday. Usually these are "quick reads" and sort of a mix between a story in the LA Times and Food and Wine, but the content in this one was particularly fascinating and alarming at the same time.
The last IPO this year was on March 19th. It was CardioNet , which is a great company Jim Sweeney started/runs down in San Diego (and participated in OCTANe's CA Medical Device Forum in 2006) at the intersection of health care and wireless data. (Congrats, Jim). However, that was MARCH 19th and it's June now!! There have been hundreds of venture-backed investments since March 19th, but none of the existing investments have gone IPO?
Sure many have been bought or "monetized" by VCs, but what is going on? The total number of IPOs is six for 2008 per the article and no "tech ones" since Valentine's Day? How much love is that? The trend is alarmingly getting worse as detailed below. Some points to ponder....
1. Is this tied to the subprime mess? Does a "spooked" capital market in one asset class bring down the whole capital chain as far as investment capital realization and availability?
2. Is an IPO not a real relevant option for VCs anymore and companies are being "built to be sold; not built to prosper?"
3. Will global, non-US markets with less regulations, be the choice going forward for IPOs?
4. Are we producing just "incremental innovation companies" instead of TRUE disruptive innovative companies? (Everyone these days talks innovation and brands it, but where is it?)
5. Or is it just one heck of a St. Patty's Day hangover....
Well 12 companies are filed and ready to go and let's wish them well as risk taking venture capital needs liquidity options to prosper; staying private usually does not pay the bills.
Interesting factoid ... last time there was this IPO lull was 2003, oil was about $25-$30 a barrel. Here in 2008 it is around $130. So while we lament our VC-backed IPO drought, we also get to regret not buying the oil futures index 5 years ago.
Thoughts?
The last IPO this year was on March 19th. It was CardioNet , which is a great company Jim Sweeney started/runs down in San Diego (and participated in OCTANe's CA Medical Device Forum in 2006) at the intersection of health care and wireless data. (Congrats, Jim). However, that was MARCH 19th and it's June now!! There have been hundreds of venture-backed investments since March 19th, but none of the existing investments have gone IPO?
Sure many have been bought or "monetized" by VCs, but what is going on? The total number of IPOs is six for 2008 per the article and no "tech ones" since Valentine's Day? How much love is that? The trend is alarmingly getting worse as detailed below. Some points to ponder....
1. Is this tied to the subprime mess? Does a "spooked" capital market in one asset class bring down the whole capital chain as far as investment capital realization and availability?
2. Is an IPO not a real relevant option for VCs anymore and companies are being "built to be sold; not built to prosper?"
3. Will global, non-US markets with less regulations, be the choice going forward for IPOs?
4. Are we producing just "incremental innovation companies" instead of TRUE disruptive innovative companies? (Everyone these days talks innovation and brands it, but where is it?)
5. Or is it just one heck of a St. Patty's Day hangover....
Well 12 companies are filed and ready to go and let's wish them well as risk taking venture capital needs liquidity options to prosper; staying private usually does not pay the bills.
Interesting factoid ... last time there was this IPO lull was 2003, oil was about $25-$30 a barrel. Here in 2008 it is around $130. So while we lament our VC-backed IPO drought, we also get to regret not buying the oil futures index 5 years ago.
Thoughts?
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