The venture-backed IPO lull continued in June, with just six VC-backed companies going public and raising $297 million. June 2004, in contrast, boasted 14 venture-backed IPOs that collectively raised $1 billion. The average size of this year’s offerings ($72 million) is also considerably smaller than it was a year earlier ($114 million).
The good news is that the IPO aftermarket is finally heating up. The average venture-backed new issue gained 38.5% from its IPO price to its closing price on June 30. Either Wall Street is warming up to VC-backed issues or underwriters are getting much more rational with their pricing. Four of the six VC-backed IPOs in June held steady at or near their IPO price and two-LHC Group and Allion Healthcare-gained more than 25% apiece. Just two months prior, the two venture-backed IPOs in the month of April-DexCom and Fastclick.com-were both trading down more than 15% from their offering prices.