venture backed ipo market impacted by economic uncertainty
TRANSCRIPT
Contacts: Jeanne Metzger, NVCA, 703-524-2549 ext. 116, [email protected] Josh Radler, Thomson Venture Economics, 973-353-7139, [email protected] VENTURE BACKED IPO MARKET IMPACTED BY ECONOMIC UNCERTAINTY
Only One Venture Capital Backed Company Goes Public in First Quarter of 2003
Newark, NJ—April 1, 2003--One US- based venture-backed company, Accredited Home Lenders, Inc., raised $77.2 million through an initial public offering (IPO) in the first quarter of 2003, according to Thomson Venture Economics and the National Venture Capital Association. This figure represents a decline from the fourth quarter of 2002 when four US based venture-backed companies went public. It is also down from a year ago when four companies went public during the first quarter of 2002. Venture-backed companies were not alone in feeling the impact by the continued struggling economy. Overall the total US IPO market only saw three companies go public during the first quarter of 2003 raising $295.8 million dollars compared to twenty-six IPOs in the fourth quarter of 2002 raising $3.4 billion. Accredited Home Lenders, Inc., which provides wholesale mortgage services received financing from established venture capital firms Enterprise Partners and Crosspoint Ventures. The Company offered 9,650,000 common shares at an offer price of $8 dollars per share and the lead manager on the issuance was the Friedman Billings Ramsey Group.
Analysis of Recent Quarters' IPOs
Quarter Ending
Number of IPO's
Number of
Venture Backed IPO's in the U.S.
Total Venture Backed
Offer Size ($Mill)
Avg. Venture Backed
Offer Size ($Mill)
Total Venture Backed
Post Offer Value ($Mill)
Avg. Venture Backed
Post Offer Value ($Mill)
12/31/2000 44 20 1,505.5 75.3 9,182.3 459.103/31/2001 19 8 500.1 62.5 2,462.7 307.806/30/2001 29 8 662.5 82.8 4,047.6 505.909/30/2001 11 5 279.9 56.0 994.6 198.912/31/2001 29 14 1,447.7 103.4 5,912.4 422.303/31/2002 21 4 376.3 94.1 2,398.0 599.506/30/2002 40 14 1,336.1 95.4 5,339.1 381.409/30/2002 7 1 30.0 30.0 153.4 153.412/31/2002 26 4 231.2 57.8 523.8 130.903/31/2003 3 1 77.2 77.2 147.8 147.8
Thomson Venture Economics/National Venture Capital Association
The drop in venture-backed IPO activity comes at a time when the public markets continue to struggle amidst substantial economic uncertainty. This ambiguity coupled with a precarious global climate has created an instability that many in the venture industry are waiting out. Jesse Reyes, Vice President of Thomson Venture Economics, states "The venture industry has been looking for signs of life in the exit market. For now, it is not the IPO market. Hopefully the trade sale exit market will compensate." “Venture capitalists continue to take a prudent and patient approach regarding potential exits for their portfolio companies,” said Mark Heesen, President of the National Venture Capital Association. “The combination of a struggling economy and now a war of uncertain length fosters an environment that is not that conducive for young start-ups to go public. The venture community is committed to supporting their portfolio companies and building sustainable businesses, recognizing that exit opportunities will inevitably emerge for solid companies.” The National Venture Capital Association (NVCA) represents over 470 venture capital and private equity organizations. NVCA's mission is to foster the understanding of the importance of venture capital to the vitality of the U.S. and global economies, to stimulate the flow of equity capital to emerging growth companies by representing the public policy interests of the venture capital and private equity communities at all levels of government, to maintain high professional standards, facilitate networking opportunities and to provide research data and professional development for its members. For more information visit www.nvca.org.
Thomson Venture Economics, a Thomson Financial company, is the foremost information provider for equity professionals worldwide. Venture Economics offers an unparalleled range of products from directories to conferences, journals, newsletters, research reports, and the Venture Expert™ database. For over 35 years, Venture Economics has been tracking the venture capital and buyouts industry. Since 1961, it has been a recognized source for comprehensive analysis of investment activity and performance of the private equity industry. Venture Economics maintains a long-standing relationship within the private equity investment community, in-depth industry knowledge, and proprietary research techniques. Private equity managers and institutional investors alike consider Venture Economics information to be the industry standard. For more information about Venture Economics, please visit www.ventureeconomics.com. Thomson Financial Thomson Financial (www.thomsonfinancial.com), is a US$1.6 billion provider of information and technology solutions to the worldwide financial community. Through the widest range of products and services in the industry, Thomson Financial helps clients in more than 70 countries make better decisions, be more productive and achieve superior results. Thomson Financial is part of The Thomson Corporation (www.thomson.com), a leading provider of value-added information, software applications and tools to more than 20 million users in the fields of law, tax, accounting, financial services, higher education, reference information, corporate training and assessment, scientific research and healthcare. The Corporation reported 2001 revenues of US$7.2 billion and its common shares are listed on the New York and Toronto stock exchanges (NYSE: TOC; TSX: TOC).
###