Q2 US Venture-backed IPOs

Venture-backed companies achieving an IPO in the US in Q2 was slightly less than the number that achieved one in Q1, although the previous quarter’s figure gives a fair indication of the problems venture-backed companies are facing in this area. Only ten venture-backed companies raised $714.1m in Q2, compared with ten companies that raised $720.7m in Q1.

“Two consecutive quarters at these lower levels begins to get concerning from a macroeconomic standpoint,” said Mark Heesen, president of the National Venture Capital Association. “The mergers and acquisitions market for venture-backed companies continues to show signs of strength which helps to balance the lacklustre IPO market. However, a pipeline of new, public companies is critical to job and revenue creation here in the US. We would like to see these numbers improve in the second half of the year, but what we are hearing is that the regulatory market hurdles remain high. In many instances, companies are favouring other alternatives such as seeking an acquisition strategy or just treading water.”

In addition to the IPOs completed in Q2 there are 38 venture-backed companies in registration with the US Securities and Exchange Commission (SEC.) These companies filed with the SEC in 2004 or 2005 and are now preparing for their IPO. This is the same number of companies in registration at the close of Q1.

For the rolling 12-month period ending June 30, 2005, 60% of the companies that went public are trading above their offer price.