On paper, 2013 has not been able to match the pace set in 2012 for venture capital-backed companies looking to find an exit, though it has by no means been a slow year. The number of VC-backed exits was down almost 14% from 2012 and capital exited lagged by a whopping 46%. However, it is important to note that 2012’s exit volume was bolstered by the massive $16 billion IPO of Facebook and an unusually large final quarter, which was likely inflated due to the impending increase in the capital gains tax, which took effect on January 1.
Even though 2013 has not quite lived up to the mark set in 2012, one of the dominant stories for the venture capital exits arena is the huge uptick in IPOs. The strength of the public financial markets throughout the year has allowed venture-backed companies to utilize IPOs in numbers that haven’t been seen since 2007. IPOs grew from just under 8% of VC-backed exits in 2012 to nearly 15% in 2013. Without a doubt, the poster child of the 2013 exit scene was Twitter, which famously broke the news of submitting a confidential S-1 by appropriately sending out a tweet.
While companies like Twitter and Tableau Software garnered lots of media attention and speculation surrounding their IPOs, the remaining 85% of exited companies opted for acquisitions—an avenue with a little less flash but the opportunity for investors to fully liquidate in one fell swoop.
To read about a few notable acquisitions in 2013 and how they have produced some impressive returns for their venture capital investors, click here.