The vast majority of Irish venture capital companies do not foresee any significant IPO activity among their client companies before 2005 according to a new survey published by the Irish Venture Capital Association (IVCA).
Eighty-six per cent of respondents to the survey said they did not expect any IPO activity among their client companies either this year or next, while only 14 per cent expected any of their client companies to IPO over the next two years.
â€˜This reflects the nature of the Irish venture capital market where IPOs as an exit mechanism are rare,â€™ commented Conor Oâ€™Connor, chairman of the IVCA. â€˜A trade sale will always be the more likely exit strategy in Ireland for founders, investors and shareholders rather than an IPO,â€™ he added.
However, just over three-quarters of the venture capital companies surveyed said they plan to increase investment in new projects in 2003.
Oâ€™Connor said that despite an uncertain global and local economic outlook, this finding was positive news for Irish companies seeking funds over the next twelve months. â€˜It suggests that venture capital companies, as long term investors, are continuing to invest in new projects,â€™ he added.
The survey also found a more realistic attitude amongst companies seeking investment. Although the volume of investment proposals submitted to Irish venture capitalists over the last 12 months has fallen, the report suggests an increase in quality. Ninety-three per cent of venture capital companies said that valuation expectations are more realistic than 12 months ago.