Slideshow: Venture Revival is Underway as Pre-Money IPO Valuations Top Dot-Com Levels

Is the venture model broken? You’ve heard the question posed repeatedly in the past few years.

So, what is the answer? Maybe it is. Probably it isn’t. We often forget during the strains and distractions of a deep down cycle that economies go up and down. Eventually things turn higher again.

But that is not to say powerful secular forces aren’t at work in venture. It is the intersection of these secular and cyclical forces that William Quigley, a managing director at Clearstone Venture Partners, addresses in a report to be released Tuesday.

His conclusion? A new venture revival is coming. What follows is some of his reasoning:

*Quigley foresees 80 venture-backed IPOs this year, an increase that will bring the market close to the 86, pre-crisis level of 2007
*The IPOs are sporting higher pre-money valuations and putting more value in the pockets of venture investors. This is particularly true with Internet companies that benefit from the recent interest in social networking and mobile computing (i.e., look at Facebook with a projected $70 billion valuation).
*With these cyclical trends taking hold, active investors are down 56% in the nine years, reducing competition in the industry. Active investors are defined as firms with three or more deals a year.
*Further reduction in capital is setting up the remaining firms for a rebound in returns. The reduction is even more pronounced in IT considering that capital-intensive cleantech deals take a lot of money that can’t then go to high tech startups.

Here is a slideshow with details from the report.


[slide title=”Assets Under Management Fall”]

[slide title=”Fewer Active Investors”]

[slide title=”Cleantech Siphons Money From IT”]

[slide title=”Venture Backed IPOs On The Rise”]

[slide title=”IPOs Have Lagged vs M&A”]

[slide title=”Internet Companies Scale Faster”]

[slide title=”IPO Pre Money Valuations Rise”]