No VC-Backed Companies Go Public In Q2

from the first-time-in-30-years dept

It's rather surprising to find out that, for the first time in about thirty years, not a single venture-backed company went public last quarter. Even in the worst of the various downturns that have happened over the past thirty years, there were always at least a few venture-backed companies that were able to make it out. This news has some folks fretting about what it means for the VC community -- with many pointing out that a bunch of VCs have moved away from "quick flip" internet investments into more long-term alternative energy bets.

I'd also guess that Sarbanes-Oxley has a lot to do with this. Going public is a lot less appealing these days thanks to the expenses required under that law. Rather than "cleaning up" the market, it's basically made going public a toxic process, so that everyone stays private and looks for acquisition opportunities. That said, it was obvious during the boom years that companies were going public way too quickly -- and being a public company is no picnic, with the required short-term thinking it demands.

So, what happens instead? There's been some talk of creating some sort of middle road. Rather than taking companies fully public, or selling them off to big players, what about a limited market of private equity investors who would let some of the original VCs and founders cash out, while keeping the company away from public market reporting requirements? This could potentially make a lot more sense for all involved. It basically adds another layer between VCs and the public markets where the private equity guys could either eventually take the company public or sell it off themselves. Even if this doesn't really work out, one thing is pretty clear: VCs will find a way to get money out of investing in startups, even if it's not in taking companies public.

Filed Under: ipos, public markets, q2, venture capital

Reader Comments

Subscribe: RSS

View by: Time | Thread

  1. icon
    Mike (profile), 1 Jul 2008 @ 1:38am


    It's not a very good guess but it is your only guess : the article is just an excuse to knock SOX which your commentators have established you have never understood.

    Hmm. Well, actually, no the article isn't just an excuse to knock SOX. You don't think it's interesting that no VC-backed startup has gone public for the first time in 30 years? That seems worth commenting on.

    Also, the focus of the post was on what the lack of an accepting public market might mean for VCs, with the conclusion that they would adapt, whether or not SOX is there.

    So to say that this is just bashing SOX suggests that you didn't even read the post.

    As for not understanding SOX, I'd disagree, but it's not like you presented any evidence, so my guess is you're just trolling. If you'd like to actually discuss the facts, we can do that, but given what you wrote, my sense is you don't want to discuss. Your comment was "just an excuse to knock" me. Except you failed. Miserably.

    Would you like to try again?

Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here

Subscribe to the Techdirt Daily newsletter

Comment Options:

  • Use markdown. Use plain text.
  • Remember name/email/url (set a cookie)

Follow Techdirt
Techdirt Gear
Shop Now: Techdirt Logo Gear
Report this ad  |  Hide Techdirt ads
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Report this ad  |  Hide Techdirt ads
Recent Stories
Report this ad  |  Hide Techdirt ads


Email This

This feature is only available to registered users. Register or sign in to use it.