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Why IPOs are Poised for a Comeback

  • A VC, Monday, May 4, 2009 11:15 AM
Noted tech venture capitalist Fred Wilson thinks the end of the IPO drought is nigh, possibly as soon as the end of this year. He cites five reasons why this will happen:

1- VCs "have been in the penalty box" for nearly a decade now, and it's time to come out (hey, the investment bankers who helped take all those Internet startups public got out much, much earlier)

2- There are some solid startups out there right now, waiting for the right time to go public.

3- Many of these companies are not ad-supported; they are subscription-based or annuity type business models "that make for great public companies."

4- When investors start buying stocks again, they will look for simple business models, products they can understand, and balance sheets with cash, which is exactly what VCs produce

5- Sarbanes-Oxley is now well understood by accounting firms and finance teams. Sarbox compliance tools are now big business, meaning that the industry has come to learn how to deal with it.



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