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2012 Exits: We'll Take the Quality PDF Print E-mail

Mark Heesen

Written by Mark Heesen   

Today the NVCA and Thomson Reuters released our Q4 and Year End 2012 Exit Poll which measures venture-backed IPOs and M&As.  The year was a disappointment when it comes to volumes.  The promise of a more robust IPO market driven by a stronger, JOBs Act fueled pipeline never materialized as the market stalled in the third quarter after the Facebook IPO and again as we approached the Presidential election and fiscal cliff in Q4.  That same uncertainty kept M&A volumes lower as well, as strategic buyers also stood on the sidelines and awaited decisions in Washington.  Yet, the 2012 exit market did have one thing going for it:  Quality.

While the average IPO offering in 2012 was double that of 2011, that gain can be largely attributed to the massive Facebook IPO.  But looking beyond that one offering, seven of the eight companies that went public in Q4 are trading above their offering price, and 30 out of 49 are doing so for the year.  On the M&A side, the average disclosed transaction value was 25 percent higher than in 2011 and the percentage of transactions bringing in more than 4 times the investment was consistently over 50 percent throughout the year.   We were on the right side of quality for venture-backed exits in 2012 and expect this trend to continue.

The market is open and investors are ready to reward strong companies and transactions.  Here’s hoping 2013 brings the stability to let our best companies shine.

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