We held shares of Isilon for years after the IPO until its exit last fall via acquisition by EMC.
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For Tumblr, the growth has been so outstanding, one might think an IPO is the ideal exit and it ought not to consider an acquisition.
The alternative is to take on significant dilution from later stage investors to carry these projects forward without a partner in the hopes of a bigger exit or IPO.
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He noted, however, that banks like AmericanWest, which were taken private post-recap, often have a stronger mandate to grow through buys in preparation of a PE exit through IPO or a strategic sale.
How will they exit if the IPO market continues to be so unforgiving?
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One of our most striking findings was that of the entrepreneurs we surveyed who had a successful exit (that is, an IPO or sale to another firm), about 70% did NOT start with a business plan.
Many analysts believe that the IPO is being driven by a government desire to exit from GM ownership as soon as possible, even at the expense of better recoupment of the taxpayer investment.
According to Libin, the venture capital model has changed substantially in the last decade so there are now VCs who are willing to invest without a short-term exit (in the form of an IPO or acquisition).
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CVC, which invested in Formula One in 2006, is under no pressure to exit its investment after it sold stakes to institutional investors ahead of the planned IPO last year, cutting its stake to around 35% from 63%.
Some private equity firms have been able to exit some of their investments by listing them on the stock market amid a stronger IPO environment in the last few months.
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Citigroup had expected to exit its investment through an initial public offering but wasn't able to do that when the IPO market soured.
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