via WilmerHale

New Reports find IPOs on the Rise in California, Venture Capital Down Slightly

Two new reports find the number of initial public offerings (IPOs) in California grew in 2012 and is likely to continue strong in 2013, with six new IPOs already in 2013. At the same time, venture capital (VC) investing declined slightly but the state is expected to maintain its leadership role, as the No. 1 source for VC-backed companies.

For more on California and national trends, please see the 2013 IPO Report (p. 8) and the 2013 Venture Capital Report (p. 6).

Among the California findings were:

· California IPOs rose 33% in 2012 from 2011, but the median offering size declined 19%.
· California should produce significant IPO activity in 2013, including offerings from social media, biotechnology and clean-tech companies. Already it’s had six IPOs in the first quarter of 2013: KaloBios Pharmaceuticals ($70 million), Marin Software ($105 million), Model N ($104.5 million), Silver Spring Networks ($80.8 million), TRI Pointe Homes ($233 million) and Xoom ($101 million).
· The state’s average IPO ended 2012 up 23% from its offering price.
· The state experienced a slight dip in VC financing in 2012– although the year’s deal tally was the second largest since the dot-com boom of 2000.
· California was responsible for 40% of financing transactions in 2012, including the five largest VC-backed IPOs of 2012.

Two Palo Alto-based partners in the WilmerHale law firm, who helped prepare the reports, are available to comment on them: Peter Buckland, co-chair of the firm’s Emerging Company and Venture Capital Practice Group, and Daniel Zimmermann, a partner in the Corporate, Emerging Company and Venture Capital Practice Groups. Please contact me to schedule an interview: Laura Mecoy, 310.546.5860 or lmecoy@stantoncomm.com

Here is some additional information about the two reports and third report on M&A activity around the country:

WilmerHale’s 2013 IPO Report offers a detailed analysis of, and outlook for, the IPO market. The report features regional breakdowns, a Q&A with former SEC Corp Fin Director Meredith Cross, and a discussion of the use of social media for investor communications under Regulation FD. It provides data on the elements of relief being chosen by emerging growth companies under the JOBS Act; offers practical insight on “test-the-waters” communications and scheduling the first annual meeting of stockholders; summarizes IPO disclosure requirements applicable to directors, officers, 5% stockholders and selling stockholders; discusses Form 10 IPOs as an alternative route to going public and presents useful IPO market metrics that are ordinarily unavailable elsewhere.

The 2013 Venture Capital Report offers an in-depth analysis of, and outlook for, the US and European venture capital markets. The report features industry and regional breakdowns, an analysis of trends in venture capital financing and VC-backed company M&A deal terms, a look at the federal tax advantages of investments in “qualified small business stock,” and a discussion of JOBS Act benefits for startups that never plan to go public.

The firm’s 2013 M&A Report contains a detailed review of, and outlook for, the global M&A market. Other highlights include a discussion of the challenges and benefits of selling a company in a “dual-track” IPO, a comparison of public and private acquisitions, an analysis of issues and opportunities in California M&A deals, and a review of takeover defenses adopted by public companies.

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