Value of Venture-Backed IPOs Falls to New Low

The number of U.S. venture-backed companies staging initial public offerings in the first quarter rose 63% from a year earlier, but the median amount raised by these companies has plummeted to a new low.

According to newly released data from Dow Jones VentureOne, the median value raised in venture-backed IPOs during the quarter was just $33.75 million, the lowest total since at least 1999 when VentureOne began the study. During the last seven years that figure had never fallen below $40 million in a quarter.

A further sign of weakness in the IPO market: The median pre-money, or pre-IPO, valuation of these venture-backed companies in the first quarter was $98.7 million, down from $150.5 million in the first quarter of 2005, and the lowest total by far since at least 1999.

The previous low was $124 million in the fourth quarter of 2002.

Nick Sturiale, a partner with venture capital firm Sevin Rosen Funds in Palo Alto, said the sparse returns from going public was grim news but not surprising. However, Sturiale said that “the cold winter is showing signs of spring,” based on anecdotal evidence in the investing community in Silicon Valley.