• Forbes.com, Thursday, April 12, 2007 10:45 AM

Don't believe what you've read: IPOs in the tech sector are back. in the first quarter alone, nine venture capital-backed tech companies went public, with three IPOs just two weeks ago. However, unlike the cavalier days of the late Nineties, these firms aren't wide-eyed startups; rather, they're mature enterprises. And for the most part, they're not Internet media firms: they sell things like networking hardware and wireless Internet service.

Meanwhile, there was nary an IPO to be found from our Web 2.0 firms during the same period. Surprised? You shouldn't be, because two major factors have contributed to the caution: One is the hard lesson learned from the tech bubble's bursting, and two is the whopping sums the Internet majors have paid for promising startups. The urgency to acquire is spurred not only by the fierce competition between them, but also the fast-pace with which consumers are adopting new technologies and trends.

Which means the private-equity firms and venture capitalists funding these startups are laughing all the way to the bank. Biggies like Benchmark Capital, Sequoia Capital and Draper Fisher Jurvetson are growing fatter. The result: the late Nineties mentality of the overnight IPO is probably gone forever. Public companies need to bring something (like revenue) to the table in order to win investor confidence. That means private-equity firms willing to shoulder big risk will continue to reap big rewards for spotting the next big thing.

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