Third Quarter IPO Results Fall Short of Lofty Expectations

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Oct. 8, 2004--The first half of 2004 was a boon for venture capital as 34 venture-backed companies hit a rejuvenated IPO market, 24 in the second quarter alone. With the August IPO of web searcher Google leading the way, observers figured the third quarter promised more of the same.

Fourteen companies went public from July through September, raising a respectable $2.3 billion -- $1.7 billion from Google alone, according to VentureOne, a Dow Jones & Co. newsletter. The results looked crisp compared to the $1.5 billion raised by 22 venture-backed companies in all of 2003, yet dampened any hopes of a return to the IPO frenzy of the dot-com era.

On the other hand, overall investment by venture capitalists is up 19% from last year, up from $14.1 billion to $16.8 billion, according to VentureWire, another Dow Jones publication.

Biotechnology and telecommunication companies led by companies like Avera Pharmaceuticals and Vonage Holdings attracted the most attention from the venture capital community, though semiconductor manufacturers and companies addressing computer-security concerns were also popular with speculators.

Final results for the third quarter should be finalized in the next several weeks.


DARREN DAHL

Darren Dahl is a contributing editor at Inc. magazine, which he has written for since 2004. He also works as a collaborative writer and editor and has partnered with several high-profile authors. Dahl lives in Asheville, North Carolina.




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