2008-2009 Worst for IPOs since 1970s

By January 04, 2010

IPOs were recovering at the end of 2009, but still have a ways to go to reach pre-recession levels, according to Thomson Reuters and the National Venture Capital Association’s (NVCA) Exit Poll. “While 2009 was a year many ven

ture capitalists and entrepreneurs would choose to soon forget, the fourth quarter offered signs of hope for the coming year in terms of improved exit activity,” said Mark Heesen, president of the NVCA.
The good news is that IPOs are back at 2007 levels. The bad news is that last two years have been the slowest consecutive years for IPOs since 1974-1975.
There were five venture-based IPOs in Q4 2009, totaling $649.3 million. The total dollar amount was in line with Q2 and Q3 averages, and was more than all of 2008 combined ($470.2 million).
Overall, there were just over twice the number of IPOs in 2009 than there were in 2008 (13 vs. 6), but we are still a far, far cry from 2007, when there were 86. On the positive side, 2009’s average IPO offer amount of $149.4 million was not only double last year’s amount, it is the highest yearly average since the NVCA started tracking the deals in 2003.
“Clearly, we have a long way to go towards a full recovery but we are encouraged by the increasing acquisition values and the number of companies that have filed a registration with the SEC to go public,” Heesen said. “We expect to see a gradual but marked improvement in 2010 and hope to have exponential improvements this time next year.”
Two of the five IPOs were in the IT sector. The two deals were worth $236.2 million. Network-protection-system developer Fortinet, Inc, based in Sunnyvale had the higher exit, raising $156.3 million.

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