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Marooned! VCs Stuck in the Public Markets

This article was originally published in Start Up

Executive Summary

One group badly hurt by the miserable public market: VCs who remain stuck in companies they took public too early. We review the most threatened companies among those companies that went public since 2003, showing why financing risk is now as important to VCs as regulatory and clinical risk. Meanwhile, current investors are recalibrating, way down, the price at which they can raise new money.

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With the IPO market as bad as it's ever been and acquisitions uncertain, VCs are looking around for alternative exits for their late-stage companies. One strategy being discussed: selling their late-stage start-ups, to PE-backed private-company acquirers -- acquirers which are by and large still to be created. These mega-startups would have access to plenty of capital (just not public capital) and would be looking to build businesses all the way to profitability, at which point these could be sold to someone else or go public in a very liquid offering. But while there's enough money in private equity to accomplish the strategy, it's hardly straightforward - and for now the talk of this alternative path to liquidity through private equity is just that: talk.

Best of the Blog: IN VIVO, June 2008

Best of the Blog is a monthly column highlighting the best of our free online content at www.windhover.com/blog. In June and early July, Windhover's editorial staff posted more than seventy articles to the site, covering biopharma, device and diagnostics R&D, business development, regulatory and commercial news. Highlights included our very first "fantasy dealmaking" post as well as our take on PhRMA's new marketing regulations. Here are a few of our favorite blog posts for stories not covered elsewhere in this month's IN VIVO.

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Best of the Blog is a monthly column highlighting the best of our free online content at www.windhover.com/blog. In June and early July, Windhover's editorial staff posted more than seventy articles to the site, covering biopharma, device and diagnostics R&D, business development, regulatory and commercial news. Highlights included our very first "fantasy dealmaking" post as well as our take on PhRMA's new marketing regulations. Here are a few of our favorite blog posts for stories not covered elsewhere in this month's IN VIVO.

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