It is bleak out there |
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Mass High Tech
It is bleak out there
Source: DowJones VentureSource
Here's the good news. Three venture-backed companies actually were able to complete initial public offerings during the second quarter, ending a dry spell that stretched all the way back to the summer of 2008.
But despite that positive nugget, today's Dow Jones VentureSource report was filled with more bad news for the venture industry. Take this for example: Venture-backed liquidity -- IPOs and M&A deals -- fell 57 percent to $2.8 billion during the second quarter.
That means there are fewer companies selling out at high valuations, a trend line that's causing concern in the venture capital ranks and leading some to say the VC model is forever broken.
In fact, the VentureSource report found that the median amount paid for a venture-backed company during the second quarter was a little less than $22 million -- a 46 percent drop from the median price paid during the same period last year.
We've seen some acquisitions at low valuations in recent weeks, including the sale of mobile software company Dexterra. It sold to Antenna Software for far less than the venture capital it raised. Meanwhile, Bellevue online advertising company Zango also sold out for pennies on the dollar.
As far as IPOs go, that's not looking much better. Take a guess on the last high-tech IPO to emerge from Washington state?
Give up?
That would be Clearwire, the Kirkland broadband wireless company. It went public in March 2007 -- nearly 30 months ago.
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