80 Percent Of Venture Capitalists Fear IPO Market 'Very Weak': Survey

SAN FRANCISCO - More than 80 percent of venture capitalists believe the initial public offering market is at very weak levels, according to a new survey from Deloitte and the National Venture Capital Association.

The relative dearth of public offerings curbs returns to venture capital investors, crimping the VC industry, they say.

The IPO market has been picking up of late, but remains weak by historic standards. In the U.S., 75 IPOS have priced this year, up 27 percent from this time last year, according to Connecticut-based Renaissance Capital. Proceeds in the first quarter totaled $13.3 billion, more than double last year.

Traditionally, more venture-capital investments find exits through acquisitions than through IPOs, but public markets remain a key part of overall venture-capital strategy.

Some investors worry that the performance of online radio company Pandora Media's IPO could put a crimp on the market. Pandora debuted on the New York Stock Exchange last week and the stock has fallen below its offer price of $16 after a short, sharp rise.

The venture investors also said they were beefing up investments in cloud computing, social and new media, and clean technology.

The survey consulted venture capitalists globally, including in the United States, China and the U.K.

(Reporting by Sarah McBride, editing by Bernard Orr)

Copyright 2011 Thomson Reuters. Click for Restrictions.

Comments

[GoldsteinD]

11:36 AM on 06/23/2011

the only cure is a modification of Sarbanes Oxley

[dsa1115]

12:43 AM on 06/23/2011

I would advise Groupon to put that IPO on hold for now.

[bg66astoria]

09:31 PM on 06/22/2011

No $$$ in the consumers' hands = $0 for these 2 turkeys.

No surprise.

[hattrick752]

03:24 PM on 06/22/2011

this is great! hopefully this will the case for future pump and dump schemes

[Peter Combs]

12:42 PM on 06/22/2011

If they want to offer lousy comapnys like Linkdin and Pandora..what do they expect?

[AJCOHEN]

11:38 AM on 06/22/2011

Pandora isn't a good indicator of the overall strength of the market, weak offerings will see weak results. Pandora's issue is one of a problematic business model that scales costs as it scales users. Put a better offering out that scales net income to users/customers and you'll see a different result, the investing public has been burned more than once and has a long memory.