Are IPO Valuation Haircuts to Blame for Dearth of VC Tech IPOs?
March 27, 2015
The number of technology companies going public has dwindled to a trickle. One potential contributing factor is that private valuations have been exceeding those that the public markets would give to these companies. To test this, we ran some analysis using our valuations and public market data to find evidence of IPO haircuts (a drop in valuation at the IPO from the round prior to the IPO). We identified 68 U.S. VC-backed tech companies for which we have valuation data in the round directly before their IPO and found that about 20% of them took haircuts when going public. But that ratio has significantly increased as of late.