The FINANCIAL — New York – Slowed by stronger economic headwinds and market volatility, venture-backed Initial Public Offering (IPO) exit activity fell significantly in the third quarter, with only 5 companies going public, down 77 percent from the second quarter 2011 and 64 percent from the third quarter of last year, according to the Exit Poll report by Thomson Reuters and the National Venture Capital Association (NVCA).
By dollars, the quarter marked the weakest three-month period for venture-backed IPOs since the fourth quarter of 2009. For the third quarter, 101 venture-backed M&A deals were reported, 35 which had an aggregate deal value of $6.3 billion, up 8% over the second quarter of 2011.
“While the IPO market screeched to a halt in the second half of the 3rd quarter, the acquisitions market continued to move forward, said Mark Heesen, president of the NVCA. “Quality acquisitions continue to get done which should help venture capital firms return money to limited partners and better position themselves to raise new funds. However, current economic instability could reduce the number of high return acquisitions while keeping new IPOs at a seriously low level for the remainder of the year. Federal policymakers must address this market uncertainty if they want to fulfill the stated goal of increasing long term employment as it is these emerging growth companies that hold the key to future job creation in the United States.”
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