IPOs: Solid Q4 and 2007 Overall

Despite plenty of turmoil in the stock market, 2007 will go down as a pretty solid one for venture-backed companies that found their way to the public markets or were bought out.

According to the fourth quarter Exit Poll done by Thomson Financial and the National Venture Capital Association, 31 venture-backed companies went public in the fourth quarter, the most since the third quarter of 2000, raising $3 billion. For the year, 86 venture-backed companies went public, raising $10.3 billion, a 51% increase in volume over 2006, when 57 companies went public, and more than doubling the $5.1 billion those companies raised.

However, only 45 venture-backed companies were acquired in the fourth quarter, the lowest number of M&A exits since the first quarter of 1998, when there were 44 M&A exits. For the year, though, there were 304 venture-backed M&A transactions with a total disclosed value of $23.7 billion, the highest disclosed value since 2000.  

Perhaps what's most interesting about the numbers is what they mean for 2008. Barring a full-blown collapse in the equity markets, expect the first quarter of 2008 to be a busy one for IPOs looking to capitalize on the strong finish to 2008, particularly in technology. According to IPOHome.com technology IPOs topped 20% of deal flow for the first time since 2004 and 2007 was the most active calendar in total deal volume since 2000. 

The stunning performance of on-demand software provider NetSuite Inc. (N) to end the year should encourage other tech companies to explore the public markets. Trading at $36.58 mid-day Wednesday, shares of NetSuite have climbed more than 40% from their $26 offer price, a far cry from the inital $13 to $16 range established by the company.

Those that don't yet have the necessary financial criteria to go public can still benefit from the heated competition between Google Inc. (GOOG), Microsoft Corp. (MSFT), Yahoo! Inc. (YHOO) and seek exits through M&A.

See Exit Poll from Thomson Financial and the National Venture Capital Association

See Dec. 20 story from TechConfidential

See Jan. 2 story from BusinessWeek