Wake me up when September ends

The new issues market hit a wall in September, with just one venture-backed IPO making it out: AthenaHealth Inc. That compares to six VC-backed IPOs in September 2006.

But there is talk that we could see a huge wave of VC-backed IPOs by the end of the year, with more than 40 venture-backed companies in registration (see story in News Analysis). As of mid-October, the market was already showing signs of life.

Four venture-backed IPOs made it out as of Oct. 15: Compellent Technologies (NYSE: CML), a maker of network-storage computers, Constant Contact, (Nasdaq: CTCT), a developer of direct marketing email software, MAP Pharmaceuticals (Nasdaq: MAPP), a maker of inhaled drug products, and Targanta Pharmaceuticals (Nasdaq: TARG), a maker of antibacterial drugs. That is not far off the six VC-backed companies that went public in October 2006.

Better yet, three of the four new issues went up in first-day trading and were still above their IPO prices in mid-October. Compellent priced at $13.50 and shot up 79%, Constant Contact priced at $16 and surged 84% and MAP priced at $12 went up 11 percent. As of Oct. 15, Compellent was trading for $17.75, Constant Contact for $25.65 and MAP for $15.74.

Targanta was the only weak perfomer in the group, pricing at $10 on Oct. 10, below its range of $12 to $14, and closing at $9.40 on its first day. It dropped to $8.53 on Oct. 15.

Even with the slow September, 2007 is still on track to outpace 2006. As of the end of Q3, 55 VC-backed companies had raised $7.3 billion via public offerings, compared to 37 VC-backed companies that raised $3.5 billion in the first nine months of last year.

The average offering amount this year has also been larger—$132 million this year vs. $94 million last year. —Lawrence Aragon