The alternative to an IPO: an increasingly attractive option for VC and PE portfolio companiesp

For the past two years the market for initial public offerings for promising private companies has been slow. The number of US IPOs in 2008 plunged from 234 in 2007 to just 43, the slowest year for IPOs since 1978. Venture-backed IPOs have fared far worse - according to Dow Jones VentureSource, US venture-backed IPOs dropped from 76 in 2007 to a mere seven in 2008, and 2009 is looking to be more like 2008 than 2007. These disturbing statistics make very clear that private companies and their investors, especially venture-backed companies, have been left without a critical exit strategy and these companies have been deprived access to the critical growth capital that the public markets can provide them.