US Venture's Q2 Exit Worries

Some serious cause for concern with respect to the US venture capital market. The second quarter of calendar year 2008 (April-June) has seen zero initial public offerings (IPO) by venture capital-backed companies — the first time since 1978. This comes via the National Venture Capital Association’s (NVCA) second quarter exit report for the US venture capital market. The association represents 480 US venture capital and private equity firms in the US (this does not include buyout firms). The report, compiled in collaboration with Thomson Reuters, also notes a slowdown in exits via mergers and acquisitions. See the complete report with five-year comparative data here.

Exits routes closing off is bad news for young companies looking to raise fresh money. In fact, exits slowing down follows a similar story with respect to fundraising in the first quarter of 2008. Fewer funds returned to raise fresh capital in the first quarter

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