Venture Firms Back ‘Hybrid’ IPOs to Help Startups Sell Shares

Venture Firms Back ‘Hybrid’ IPOs to Help Startups Sell Shares - 6/1/2009

Home

Index of Filings

News and Press Releases

Filings

Decisions

Settlements

Litigation Activity Indices

Top Ten List

Annual/Quarterly Updates

Clearinghouse Research

Articles & Papers

Search

Related Sites

About Us

Local Rules

Sponsors

Register

_______________
Copyright © 2001
Stanford Law School

2009 News and Press Releases

SEARCH

News	News 2009
HEADLINES \| SETTLEMENTS AND DISMISSALS \| COURT FILINGS LINKS TO OTHER NEWS \| NEWS ARCHIVE	HEADLINES ARCHIVED SETTLEMENTS AND DISMISSALS ARCHIVED

HEADLINE NEWS:

Venture Firms Back ‘Hybrid’ IPOs to Help Startups Sell Shares
Tim Mullaney

Bloomberg. June 1, 2009
_________________________________________________________________________

EXCERPT: A company backed by a half-dozen venture capital firms and about 200 institutional investors is trying to make it easier for startups to stage initial public offerings, a bid to spur a recovery after the market collapsed. InsideVenture Inc. will introduce a new kind of transaction today called a “hybrid public-private offering,” Chief Executive Officer Mona DeFrawi said in an interview. Startups selling stock under the program would make the same filings as in a regular IPO. The shares would be offered first to investors that work with Menlo Park, California-based InsideVenture. The HPPO, pronounced “Hippo,” is a new part of the venture-capital industry’s response to the worst drought of IPOs in at least 38 years. The program is designed to spur interest in technology startups and create a new way for venture capitalists to earn a return on their investments. “We had this wonderful IPO market in the 1990s,” DeFrawi said. “Then we abused it, and since we’ve had a hangover. We want to reorient the market to long-term growth.” Connecting venture-backed technology companies directly to investors will let firms that are too small to interest large investment banks try to raise money, said David Weild, executive chairman of InsideVenture. The HPPO process will be similar to an ordinary IPO, where investment banks underwrite the offering and sell shares to the public, said Weild, a former vice chairman of the Nasdaq Stock Market. Companies will file quarterly reports with the U.S. Securities and Exchange Commission after they go public. The difference is that InsideVenture will help companies sell shares to its members before the offerings become final. The final regulatory filings before HPPO deals take place will disclose which institutions have already agreed to purchase shares, Weild said.

Back to News page | Back to Archived News 2009 page | Back to Top

�