Until volatility in the market decreases, and confidence returns, the initial public offering window will not meaningfully reopen. When it does, a large number of companies will be competing for the attention of institutional investors. Data from Dealogic shows that the current IPO backlog — 144 deals, valued at $28.3 billion — is the highest year-to-date backlog since 2007. The opportunity to complete a successful IPO will, therefore, continue to be selective, and limited to the very best companies.
CFOs must prepare to fund companies for a longer time before an IPO. Research from SVB Analytics, a nonbank affiliate of Silicon Valley Bank, shows the time required for a venture-backed technology company to reach a successful exit is longer: the median time is now more than five years for software companies, and a significant number of hardware companies with successful exits in 2010 received their first institutional money in 2000 or earlier. Clearly, management teams and boards must consider alternative financing methods.
To read the full, original article click on this link: When the IPO Window Closes
Author:Mike Selfridge
