Where Are The Web 2.0 IPOs
Published April 11th, 2007
Once a relic of the last stock boom, initial public offerings are back–and tech IPOs are really back. In first quarter of 2007 alone, nine venture-backed tech companies have floated stock, with three tech IPOs during the week before last.
But don’t look for photos of Silicon Valley kids in flip-flops grinning after striking it rich on the Nasdaq. The tech companies that have gone public so far this year are, um, mature, if not a little staid–they sell things like networking gear and wireless Internet service.
Meanwhile, the most heavily hyped segment of the tech boom–the glitzy “Web 2.0″ companies–has produced a grand total of zero stock offerings. What gives?
After all, Web 2.0 companies often share traits with tech ancestors that went public during the last boom–lots of hype, little to no revenues–as well as some of the same investors. Big Web 2.0 investors include Benchmark Capital, Draper Fisher Jurvetson, Sequoia Capital and eBay (nasdaq: EBAY - news - people ) founder Pierre Omidyar’s fund.
But venture capitalists say that while the boom is back, there is a fundamental change: The era of the overnight IPO, they say, is gone forever. That means that almost all of the Web 2.0 companies that have sprung up in the past few years simply aren’t mature enough to go public.
“It’s almost a 1999 mentality to say, ‘How do you build a public company in three years?’ You don’t,” said Bill Gurley, a general partner with Benchmark Capital who sits on the board of Web 2.0 real estate venture Zillow.com.
source forbes.com
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