December 28, 2006
Tech IPOs: still open for business
Despite the hand-wringing from the venture capital crowd, it seems 2006 wasn’t such a disastrous year after all.
It was only a couple of months ago that the National Venture Capital Association in the US was issuing dark warnings about the threat to start-up technology companies from waning public market interest in IPOs. That added spice to a debate that has been getting plenty of airtime recently: whether the venture capital model, as practised in Silicon Valley, is somehow "broken."
Well, at least the IPO part of the model seems to be working just fine. Thanks to a late spurt of deals, 2006 turned out to be a pretty good year. These are the numbers from Renaissance Capital (covering both tech and non-tech deals):
| IPO Summary Stats | |||||||||
| 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | |
| No of Deals | 247 | 486 | 406 | 83 | 70 | 68 | 216 | 194 | 198 |
| Total Proceeds (billions) | $45 | $93 | $97 | $41 | $24 | $15 | $43 | $34 | $43 |
| Average Deal Size (millions) | $181 | $191 | $240 | $491 | $338 | $224 | $198 | $175 | $217 |
The top performing IPO of the year, according to Renaissance: Riverbed Technology, with a gain of more than 200 per cent since it went public in September. The company, which makes storage for wide area networks, was backed early on by Accel and Lightspeed, with UV Partners and Goldman Sachs taking part in later rounds.
