Not many Silicon Valley companies have gone public in recent years. And as 2009 draws to a close, the past 12 months have followed the same lackluster pattern.
Through early this week, eight venture-capital-backed companies had gone public in 2009, according to research firm VentureSource. (VentureSource is owned by News Corp., which also owns Dow Jones & Co., publisher of The Wall Street Journal.) That was better than 2008, when seven venture-backed companies had IPOs.
But of the 2009 venture-backed IPOs, just two were locally based, notes VentureSource: San Francisco online reservations company OpenTable Inc. and security-technology company Fortinet Inc. in Sunnyvale.
Still, OpenTable Chief Financial Officer Matt Roberts doesn’t expect the drought of local IPOs to last. Other Silicon Valley start-ups have been talking to OpenTable about the IPO process recently, he notes.
Maynard Webb, chief executive of contact-center software company LiveOps Inc. in Santa Clara, says he has talked to OpenTable about the IPO process and gleaned “a lot of learnings.” While LiveOps isn’t anticipating it will go public imminently, it is preparing to do so down the line.
“The window to go public didn’t look so good 18 months ago, but in the last six months, we’ve been way more encouraged,” says Mr. Webb.
Start-Up IPOs Go Elsewhere
![[IPO buffet]](http://s.wsj.net/public/resources/images/SF-AA065C_THEVA_NS_20091230223239.gif)
How much seed money should I raise? – Venture Hacks
Chris Dixon, serial entrepreneur and seed-stage investor:
“… You should try to answer the question: what is the biggest risk your startup is facing in the upcoming year and how can you eliminate that risk? You should come up with your own answer but you should also talk to lots of smart people to get their take (yet another reason not to keep your idea secret).
“For consumer internet companies, eliminating the biggest risk almost always means getting ‘traction’ — user growth, engagement, etc. Traction is also what you want if you are targeting SMBs (small/medium businesses). For online advertising companies you probably want revenues. If you are selling to enterprises you probably want to have a handful of credible beta customers.
“The biggest mistake founders make is thinking that building a product by itself will be perceived as an accretive milestone [emphasis added]. Building a product is only accretive in cases where there is significant technical risk — e.g. you are building a new search engine or semiconductor.”
Read the rest of Chris’ What’s the right amount of seed money to raise? Also see our post, How do we set the valuation for a seed round?
If I had to stuff my answer to this question into one sentence, I would say: “As much as possible while keeping your dilution under 20%, preferably under 15%, and, even better, under 10%.” Raising as much as possible is especially wise for founders who aren’t experienced at developing and executing operating plans.
This is quite near and dear to my heart at the moment. I think the Venture Hacks summary in their post is quite true, as much as you can without diluting too much.
Leave Them Wanting More
There has been lots of talk about how best to pitch. A Harvard Business School professor recently noted how energy and comfort matter, and Keynote is better than PowerPoint. Sarah Tavel with Bessemer Venture Partners tweeted the message below, implying demos trump powerpoint. Ahuva posted about Death by PowerPoint.
This is a good primer for how to approach pitching your company, product, or concept by making it as interesting as possible and leaving them wanting more.
