Dearth of IPO’s
Rod Drury laments the lack of local tech IPO’s in a recently posted IT Brief article. Proudly pointing out that “so far Xero is the only software start up to have successfully raised $15 million in an IPO”, he adds, “There should be two or three more software IPOs by now.”
I’m not so sure … Venturebeat recently reported that there were ZERO (sorry about that pun, it couldn’t be avoided for mathematical reasons) IPO’s in the US in the first half of calendar 2008, and that M&A activity was at its lowest level in 20 years.
While we like to believe that we are countercyclical or play by different rules here NZ, it’s suicidal to forget that we’re in a small corner of the global playing field.
My bottom line - entrepreneurs and investors need to put a reality check into that IPO dream for the near future. The best way to succeed is by building a great team, meeting a real market need, and above all running a great business by generating heaps of revenue. IPO’s are not part of the script for 2008. For the short term at least, funding will necessarily come from private equity and operational revenue.