April 1, 2014

Survey: Venture-Backed IPO Practices

2013 was the strongest year for venture-backed IPOs in almost a decade: 82 deals (the most since 2007) generated aggregate proceeds of over $11.2 billion, an average offering amount of $137.2 million. At least one venture-backed company went public each month in 2013, and the pace of IPOs has accelerated in the first three months of 2014. Here’s a venture-backed IPO survey for 2013 from Gunderson Dettmer, focusing on key governance and disclosure items.

Among others, the findings include:

– All but two of the 71 companies reviewed were incorporated in Delaware
– 35% were listed on the Nasdaq Global Market, 30% on the NYSE, – 28% on the Nasdaq Global Select Market, and 7% on the Nasdaq Capital Market
– Average time from incorporation to IPO was over 9 years
– Average time from initial registration statement submission to the SEC to pricing the IPO was 5months
– 33% of the companies have already completed follow-on offerings, frequently prior to the expiration of the 180-day IPO lock-up period
– Over 90% of venture-backed companies took advantage of the JOBS Act accommodation to submit a registration statement confidentially, spending on average 3 months in confidential registration and filing registration statement publicly 1 month before their roadshow
– Nearly half of venture-backed companies still provided 3 years of audited financials, but over 66% provide 3 or less years of selected financial information.
– Significant majority provided limited executive compensation information
– Despite the JOBS Act accommodation, a significant majority of venture-backed companies choose to be subject to new public company GAAP

Wife tells husband: “don’t trade on my confidential information.” Husband does it anyways. Husband gets caught by SEC. Repeat.

Webcast: “Rural/Metro and Claims for Aiding & Abetting Breaches of Fiduciary Duty”

Tune in tomorrow for the webcast – “Rural/Metro and Claims for Aiding & Abetting Breaches of Fiduciary Duty” – to hear Kevin Miller of Alston & Bird; Brad Davey of Potter Anderson; Stephen Bigler of Richards Layton, Stephen Kotran of Sullivan & Cromwell and Bill Lafferty of Morris Nichols as they discuss a case expected to have a dramatic impact on the viability of claims for aiding and abetting breaches of fiduciary duty in connection with M&A transactions. Please print these course materials in advance…

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– Broc Romanek