The NVCA has new data out about Q4 and full year 2010 IPO and M&A data for venture backed companies. Good news for entrepreneurs and VC’s – the IPO is back (which, in turn, helps create a healthy M&A market). A few highlights:
– Q4 IPO volume – driven largely by Chinese IPO’s – was at its highest level since 2000 (32 total, 17 from China backed by US firms)
– Full year venture-backed IPO volume was at its highest level since 2004, with 72 total
– There were more than 400 venture-backed M&A exits – the highest level since 1985
A positive M&A market for entrepreneurs and VC’s is directly related to a positive IPO market. When great companies can stick to their plan and raise public capital, it forces large buyers to move a bit more aggressively to acquire their preferred acquisition targets (buy now at $100M vs. wait a few years and pay several times more). It also can help drive up prices for the best companies, providing more highly valued comps and giving entrepreneurs/CEO’s/investors the confidence to say no at lower prices.
My next post will be on what we learned about the “new model” for IPOs, both from the market at large as well as our experience helping 6 of our portfolio companies go public in 2010.