Business Blog: Hoover’s Business Insight Zone

In this item at greentechmedia . . .

Q2: $1.7B in cleantech IPOs

. . . green-technology venture capitalist Rob Day gives details about the slew of green-tech IPOs that hit the market during the second quarter of 2007, along with information about other venture capital activity in the sector. The nugget: while VC investment in the sector (i.e. when the VCs pony up their money) was flat during the quarter, IPOs (i.e. when VCs cash out on their investments) was way up.

It’s good information, but I think Day misses a key point — or at least, he doesn’t talk about something I would have expected him to, namely that Q2 was a great time for companies to make IPOs generally. Our own IPO Scorecard for the quarter shows a broad increase in IPOs across the board. Although my judgment on this is tinged by hindsight, it was pretty clear in the middle of Q2 that it was a fine time to win a high IPO valuation.

VCs are smart, and they want to get the best valuations they can for their companies. If you’re backing something as sexy as Google or Facebook, you can pretty much pick your own timing, because the appeal of the new stock will more or less make its own market. But if you’re backing Solid Little-Known Company X, you’re better served to get in the pool when the water’s already warm — as it was during Q2.