Counting Coups: Better, Fewer Deals in 2011 for Venture-Backed Cos.

2011 was a year of bigger deals and fewer exits for venture-backed companies, according to data being released today by Dow Jones VentureSource.

VentureSource says that venture-backed companies netted $53.2 billion through a total of 522 deals of all kinds in 2011—mergers, buyouts, and IPOs. That was a 14 percent decline in the number of deals, and a 26 percent increase in capital raised when compared to 2010.

The median price paid for a venture-backed company was $71 million in 2011, a 77 percent gain over the median price of venture-backed M&A and buyout deals in 2010. VentureSource says companies raised a median of $17 million in venture financing to reach an M&A or buyout deal, which was a 12 percent slide from 2010.

The financial information service says 45 venture-backed companies raised $5.4 billion through initial public offerings in 2011. That’s significantly more capital than the $3.3 billion that 46 venture-backed companies raised in 2010. But the difference is due mostly to two IPOs in 2011, Groupon and Zynga, which together raised $1.7 billion.

“The IPO market saw some gains through the first half of the year, but the momentum was not strong enough to survive the volatility in August,” says Zoran Basich, editor of Dow Jones VentureWire, in a statement released today. “During 2012 we’ll get a sense of whether the last two years of flat IPO activity is the new normal for the industry or if there’s room to grow.”

During the fourth quarter of 2011, 10 IPOs raised $2.4 billion. Currently, 60 U.S. venture-backed companies are in IPO registration. Thirteen of those companies filed during the fourth quarter.

Connecticut-based Renaissance Capital, which tracks all IPOs, says 24 Internet companies went public in 2011—the highest number in a decade.

Renaissance Capital also counted 260 IPO filings in 2011, just one less than the 259 IPO registrations filed in 2010. But Renaissance also notes that 67 companies withdrew their IPOs in 2011, which is the second-highest number of withdrawals since 2003. The peak occurred in 2008, when 103 companies withdrew their IPOs.

Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.