Rates of Return in Health Care Information Technology IPOs
This article was originally published in Start Up
We compared recent health care information technology IPOs and broke them out comparing their total private money raised prior to IPO to their pre- and post-money IPO valuations, as well as their current valuations.
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While START-UP first noted an industry-wide tendency to overestimate the prices IPO investors were willing to pay in early 2005, IPOs have regularly fallen short of the anticipated price ever since, with few exceptions.
While the venture capital community spent roughly the same in biopharma investments in 2006 as they did in 2005, they put considerably more money into mid-stage companies (Series B and C investments), and slightly less into Series A and mezzanine rounds, than they had in 2005.
The trend of biopharma IPOs eschewing Nasdaq for European and other exchanges reverses modestly in 2006.