The IPO market is rockin’ again. You have to go back seven years to find a better May for venture-backed IPOs.
Eleven VC-backed companies made it out in May, raising $1.6 billion, up from seven VC-backed startups that raised a total of $946 million in May 2006. It was the strongest May since 2000, when 16 VC-backed IPOs raised $1.2 billion.
“Unless something unforeseen happens, right now all the systems are go,” says John E. Fitzgibbon Jr., founder of IPOScoop.com, which tracks the new issues market.
The venture-backed IPO market in particular is well positioned because technology is back in vogue on Wall Street. As of June 8, the tech-heavy Nasdaq Composite was up 131% from its October 2002 nadir, showing even stronger growth than the media darling Dow Jones Industrial Average (which was up 84% during that same period), Fitzgibbon says.
Conventional wisdom maintains that the summer months are generally poor for IPOs, but “that’s a lot of hooey,” he adds. His data show that for the past 37 years the months of June, July and August have produced 27.5% of annual IPO volume..
So let the good times roll. —Lawrence Aragon