This link has been bookmarked by 4 people . It was first bookmarked on 09 Aug 2007, by isaac Mao.
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13 Aug 07
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09 Aug 07
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There has been a theme running through the debate about venture returns over the past five years that states that venture returns have been poor because of a lack of a vibrant IPO market. I don't buy that. I think that a venture fund can deliver terrific returns to its investors without ever having an IPO in the fund. Merger and sale transactions can provide very good returns to venture investors. In fact, Broadview Associates used to show a chart that something like 80% of all venture backed companies that went public had stocks that traded below the offering price within a year of the IPO. The fact is that very few venture backed companies make great public companies. Sure there are exceptions. Google, Cisco, Apple to name a few. But those are the really great companies. For every one of them, there are hundreds that were busts as public companies. And all the parties at the table, the VCs, the managers of the portfolio companies, the investment bankers, and the public market investors are smart enough to know this is true. That has resulted in a the dearth of IPOs that everyone blames poor returns on. But I think we are just seeing a market adapt to the reality that most of the venture backed companies should be sold instead of foisted on the public markets.
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08 Aug 07
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