Look at the bottom chart. Notice anything from Jun/Jul 2009 to present? Looks to me like a steepening of the downward slope. Howard Gordon cites the “credit crunch” as a factor mentioned by VC execs. (Thanks for your comments, Howard.)

Sure, investors may want to see more gestation (i.e., proven stability) in start-ups than they did during the Tech Bubble, but IPOs are still all about growth. And you don’t grow without leverage. Duh.

Do you think most startup CEOs want to spend their time managing quarterly results for Wall Street or building the business for long-term value?

The allure of running a public company is gone. For founders without a lot of personal wealth, building a company for sale is much more appealing than taking the low-odds bet that you can build a billion $ company.

That’s a problem for VCs, who need billion $ exists to generate a net return after their bad bets and fees. Although Yelp wasn’t mentioned, Yelp’s decision to turn down the $550 million offer from Google is a classic case of a VC pushing a company to go for the $1 billion IPO instead of a sale. But Yelp raised so much money from Benchmark and others that the VCs call the shots.

It costs much less to run a tech startup than it did 10 years ago. Companies can use affiliate networks and AdSense to monetize their site before bringing in a direct sales force.

That means startups need to raise less capital, so the founders can have a life-changing exit even though the VCs didn’t put enough money in to get a huge return.

If even a survey of those who have the absolute strongest incentive to convince themselves and the public that its “all because of SOX” cannot make SOX more than number 3 on the list of reasons, then that claim is obviously a joke.

As anything else, the IPO issue is all about incentives. The incentive to do an IPO is the idea that it will make people gazillionaires. Before the IPO, they carry a fair amount of personal risk and would in most cases go bankrupt if some other new invention made their patents and product obsolete. Weighed against that risk is the desire to have more to show at the time of the IPO, so the value of the company can be hyped and the profits from doing the IPO can be greater. After the IPO they can harvest a big fat profit from their stocks and options, provided it is a success. However, if it is not a success they have simply given away their potential for a big fat profit. That is why IPO’s crater when the amount of risk willing capital crater.

It is quite simple. If the market is so hot that even dumb a$$ loser ideas/companies can be sold for billions, everybody line up to do an IPO. If the risk aversion is so high that you have to give away the company for a pittens, only the desperate will do it. Nobody will say, hey I will give it away now because without SOX it is so much easier, nor will anybody say, ooh I don’t want to become a gazillionaire because SOX has made it such a hazzle and may swallow a few hundred grand of the gazillions I will make. SOX only have a marginal effect on the incentives and therefore no visible effect on the IPO market. If anything it may create a slight increase in demand for IPO’s at times of high risk aversion, because it does provides some assurances for scared investors.

To make a meaningful evaluation of the simple # of IPO’s you have to have some idea of the number of startups with venture capital. Without startups there will not be IPO’s with or without SOX.

Said meatball necklace is here.

- Big companies are awash with cash and are taking advantage of the economic times to make strategic acquisitions. Maybe not as big a reward as an IPO but faster and cleaner.

Anyone thinking that VC’s don’t make out in IPO’s is delusional. In fact in many cases, insiders have a holding period and VC do not — meaning that, since most times prices go down after an IPO, founders do not do as well as VC’s!

Those wondering what Andy T is on about — said necklace is here

that picture is funny(-:

I have never seen a meatball necklace before- lol