Performance strong for new issues

It isn’t the flood VCs have long hoped for, but enough new issues are trickling out to keep the IPO market afloat.

Five venture-backed companies went public in April, one more than the same period a year earlier. On another positive note, the new issues raised a total of $1.4 billion, compared to the $233 million raised by four venture-backed IPOs in April 2005.

For the first four months of this year, VC-backed IPOs have raised a total of $3.6 billion. The average issue size of the deals so far this year is $158 million, a $103 million increase from the $55 million average for the same period last year.

Aftermarket performance has also been strong. The average issue on our IPO Aftermarket list—which tracks the performance of VC-backed IPOs for one year—had gained 39% from its offering price. That’s the biggest gain in three months and the second highest monthly gain in 12 months.

Of the 65 venture-backed companies that went public between May 2006 and April 2007, 44 if them (or 68%) are trading at or above their offering prices, and five have shown price increases of 100% or more.

As a group, the five new issues in April didn’t perform as well as the rest of the companies on our list. They posted an average gain of just 14 percent.

The biggest gainer was MetroPCS Communications, which saw its share price shoot up 22% to $28.05 from an offering price of $23. The second best performer was Comverge (up 19%), followed by Orexigen Therapeutics (up 17%) and Pharmasset (up 1%). Veraz Networks was the only one in the April group that saw its share price decline—it dropped 13% to $6.95 on April 30 from an offering price of $8. —Lawrence Aragon