The End of the Early-Stage IPO

By Paul Kedrosky · May 22, 2005 · ·

While the IPO market is doing better recently that it was two years ago, it is still less receptive to smaller IPOs and related risk than at any time in recent memory. Is this secular or cyclical? Venture folks want to know, as the IPO exit is a necessary condition for that market to thrive. After all, relying on someone else to buy your companies is not nearly as profitable or predictable as being able to take them public.
Some folks (somewhat self-servingly) argue that the change is secular, and that the good times are over for early-stage IPOs:

“We think the $30 million-to-$50 million IPO is going away forever and it’s going to be replaced by $30 million-to-$50 million private placement,” [Dwight] Badger [of Advanced Equities] says.

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