October 10, 2008

The IPO window is closed and won’t re-open until 2010. - Inspired by Todd Kimmel, Advanced Technology Ventures

Todd Kimmel, Principal at venture capital firm Advanced Technology Ventures, warns that new IPOs between now and 2010 and highly unlikely. The repercussions are likely to be felt by all, except early-stage companies "that plan to have their heads down for the next year or more working on proofs of concept and reducing technology risk. Those companies will be in a better position than those in need of capital to scale."

Early stage companies may in fact gain an advantage, as the gap between them and established players is likely to shrink over the course of next year: "Early-stage companies are afforded the opportunity to catch up with later-stage companies that have no choice but to wait for the IPO and debt markets to re-open."

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Comments | 2 Total

October 10, 2008 at 10:56am

Rip Empson

The window might open before 2010, but either way, it's definitely going to take some time. Ross Sinclair, the national leader for PricewaterhousCooper's IPO and income trust services team, said this: “A market is a meeting point for a willing buyer and a willing seller, and until some degree of stability returns, and we regain some certainty and predictability, we won't have a market...It won't be until some point in 2009 before we see anything like the necessary conditions." The bottom line is this: it really doesn't look good for IPOs. "Some point in 2009" certainly COULD BE 2010. A lot of people thought this crisis would have reached bottom by now, but it hasn't. So there's no question that 2010 is possible. And without IPOs, there is less VC money to go around. Without an IPO as an exit strategy, investors aren't getting a return on their money and there is no capital flowing into the companies either, so there's most likely going to be a pretty significant slowdown in both. (Not that there hasn't been a drastically shrunken IPO market for quite some time.) A potential bright side? Because companies (start-ups especially) don't have IPOs as an option right now, there will definitely be a higher rate of acquisitions. Some tech companies could really benefit from the bargain prices they could get for some of these cool new start-ups right now...

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October 11, 2008 at 9:07pm

Edward Sussman

This seems pretty obvious.

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