By Allan Maurer
HOUSTON, TEXAS—Michael Guptan, managing director of the Stanford Group Co. Investment Banking division, says the 2007 market for initial public offerings (IPOs) will be “anemic,” and “venture capitalists we talk to are focused on getting merger and acquisition exits.”
Guptan will participate in a panel related to exits at the Second Annual Southeast Venture Conference at Tysons Corner, VA, Feb. 27-28, (see www.seventure.org for more information).
Guptan says he thinks, “The IPO market will be thoroughly anemic, not so much because of weakness in technology, but because of a lot of market uncertainty. Equity investors shy away from that level of uncertainty. I think M&A will be the exit of choice. Some companies may still really want to go public, but VCs we talk to are focused on M&A exits.”
There are, he says, “Three types of tech investors. First, you have the ones with really deep domain knowledge and deep pockets. They have a deeper bucket and can weather the cycles up and down, although even they lose patience after seven or eight years.
Second, you have pre-IPO investors who come in late, taking much of the risk out of it. They have a much shorter horizon and may go into hibernation.
Third, you have investors who put money in tech as part of their portfolio. “They can take it or leave and are also much more short term oriented.”
Those with deep pockets in the first category are the ones who invest in early stage companies, Guptan says.
Some companies, he suggests, might use the time until the markets recover to “rebuild themselves or create new capabilities.” A company selling licensed software, for instance, might want to switch to selling software as a service (SaaS), which is much more popular now with buyers and investors alike, and brings Enterprise level applications to a much wider range of businesses.
Guptan notes that he’s attending the SEVC in part to call attention to the Stanford Group’s full service investment banking. The company has 40 investment bankers with, Guptan notes, “deep research expertise and investment banking expertise in M&A, private placements, PIPES, and going public. We combine strategic perspective with strong execution capabilities,” he says.
The Stanford Group has done a number of deals in the Southeast. In addition to deals in Miami and DC, the company spends a lot of time in Virginia and Atlanta as well, he says.
On the Web: www.stanfordgroup.,com
Southeast Venture Conference, February 29 – March 1, 2012 at the Ritz Carlton in Tysons Corner, VA – Where Smart Money Meets Smart People.
www.seventure.org
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