Jeanne Metzger, NVCA, 703-524-2549 ext. 116, jmetzger@nvca.org
Joshua Radler, Thomson Venture Economics, 973-353-7139, jos...
Analysis of Recent Quarters' IPOs
                                                                                  Total ...
directories to conferences, journals, newsletters, research reports, and the Venture Expert™ database. For
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Venture-Backed IPO Market Shows Signs of Life in Third Quart

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Venture-Backed IPO Market Shows Signs of Life in Third Quart

  1. 1. Jeanne Metzger, NVCA, 703-524-2549 ext. 116, jmetzger@nvca.org Joshua Radler, Thomson Venture Economics, 973-353-7139, joshua.radler@thomson.com VENTURE-BACKED IPO MARKET SHOWS SIGNS OF LIFE IN THIRD QUARTER STRONG PIPELINE AND INCREASED OFFERING VALUES INDICATE HEALTHIER ACTIVITY IN THE FUTURE Newark, NJ- October 1, 2003—Nine venture-backed companies completed Initial Public Offerings (IPOs) in the third quarter of 2003 worth $732.8 million, according to Thomson Venture Economics and the National Venture Capital Association (NVCA). This was a marked increase from the recent four quarters where only eight venture-backed companies completed IPOs in total. The increase in venture-backed IPOs mirrors the increased activity in the overall IPO market, where a total of 22 companies went public, during the third quarter. In addition to the IPOs completed this quarter, there are currently 35 venture-backed companies “in registration” with the Securities and Exchange Commission. These companies have filed with the SEC and are now preparing for their initial public offerings. With this strong “pipeline”, a higher level of activity in venture-backed IPO market appears sustainable in the near future. “Strong exit markets are essential to the long-term health of the venture capital industry. Although it’s too early to guarantee that this increased IPO activity will continue, it certainly is an encouraging piece of good news,” commented Mark Heesen, president of the National Venture Capital Association. The venture-backed companies that went public during the third quarter were beneficiaries of increased offering sizes and post-offering values, both at their highest levels since the second quarter of 2002. All nine of the venture-backed companies that issued IPOs during the third quarter are now trading at or above their offering prices. The largest IPO in Q3 was SigmaTel, Inc., which raised $150 million. SigmaTel’s investors include Creative Technology, Battery Ventures, and INVESCO Private Capital. The next largest venture-backed IPOs were: Direct General Corporation, which raised $145.58 million and was backed by SSM Venture Partners and Noro-Moseley Partners; NetGear, Inc., which raised $98 million and was backed by Pequot Capital Management and Shamrock Holdings, Inc.; iPASS, Inc., which also raised $98 million and was backed by Crosspoint Venture Partners, Accel Partners, Cisco Systems, Inc., and APV Technology Partners and Digital Theater Systems, which raised $65.28 million and was backed by Weston Presidio, Eos Partners and Scripps Ventures.
  2. 2. Analysis of Recent Quarters' IPOs Total Avg. Number Total Avg. Venture Venture of Venture Venture Backed Backed Venture Backed Backed Post Post Backed Offering Offering Offering Offering Quarter Number IPO's in Size Size Value Value Ending of IPO's the U.S. ($Mill) ($Mill) ($Mill) ($Mill) 19 9 650.1 72.2 2,902.3 322.5 03/31/2001 29 9 710.5 78.9 4,220.6 469.0 06/30/2001 14 7 542.5 77.5 2,948.7 421.2 09/30/2001 31 16 1,586.9 99.2 7,932.4 495.8 12/31/2001 18 4 376.3 94.1 2,398.0 599.5 03/31/2002 38 15 1,836.1 122.4 5,917.6 394.5 06/30/2002 7 1 30.0 30.0 153.4 153.4 09/30/2002 26 4 231.2 57.8 523.8 130.9 12/31/2002 3 1 77.2 77.2 147.8 147.8 03/31/2003 5 2 164.0 82.0 695.3 347.6 06/30/2003 22 9 732.8 81.4 3,064.5 340.5 09/30/2003 Thomson Venture Economics & National Venture Capital Association Venture Economics Post-Venture Capital Index (PVCI) Annualized Return as of 09/30/2003 Index Year to One Year Three Five Year Ten Year Value Date Return Year Return Return Return 474.70 47.1% 69.8% -27.5% 1.4% 6.3% PVCI 995.97 13.2% 22.2% -11.5% -0.4% 8.1% S&P 1,786.94 33.8% 52.5% -21.3% 1.1% 8.9% NASDAQ 9,275.06 11.2% 22.2% -4.5% 3.4% 10.1% DOW Thomson Venture Economics & National Venture Capital Association The Venture Economics Post-Venture Capital Index (PVCI) is a market cap weighted index of the performance of stock of all venture-backed companies taken public over the last 10 years. As the chart indicates, the PVCI has mirrored the NASDAQ in outperforming both the S&P and the Dow Jones Industrial Average over the past year. The National Venture Capital Association (NVCA) represents approximately 450 venture capital and private equity firms. The NVCA’s mission is to foster the understanding of the importance of venture capital to the vitality of the U.S. and global economies, to stimulate the flow of equity capital to emerging growth companies by representing the public policy interests of the venture capital and private equity communities at all levels of government, to maintain high professional standards, to facilitate networking opportunities, and to provide research data and professional development for its members. For more information about the NVCA, please visit www.nvca.org. Thomson Venture Economics, a Thomson Financial company, is the foremost information provider for equity professionals worldwide. Venture Economics offers an unparalleled range of products from
  3. 3. directories to conferences, journals, newsletters, research reports, and the Venture Expert™ database. For over 40 years, Venture Economics has been tracking the venture capital and buyouts industry. Since 1961, it has been a recognized source for comprehensive analysis of investment activity and performance of the private equity industry. Venture Economics maintains a long-standing relationship within the private equity investment community, in-depth industry knowledge, and proprietary research techniques. Private equity managers and institutional investors alike consider Venture Economics information to be the industry standard. For more information about Venture Economics, please visit www.ventureeconomics.com. Thomson Financial Thomson Financial is a US$2 billion provider of information and technology solutions to the worldwide financial community. Through the widest range of products and services in the industry, Thomson Financial helps clients in more than 70 countries make better decisions, be more productive and achieve superior results. Thomson Financial is part of The Thomson Corporation (www.thomson.com), a leading provider of integrated information solutions to business and professional markets worldwide. The Corporation reported 2002 revenues of US$7.8 billion and its common shares are listed on the Toronto Stock Exchange (TSX: TOC) and the New York Stock Exchange (NYSE: TOC).

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