For Startups, a Bleak Year for IPOs and Acquisitions

For entrepreneurs hoping to take their startup public, the outlook is bleak. According to the New York Times, the number of acqusitions and IPOs in the third quarter of this year dropped below even last quarter. That number: three.

That's better than 2008, when only six venture-backed companies went public. But compare that to prior years and the disparity is clear: 2006 and 2007 saw hundreds of public offerings. This year's largest is battery maker A123 Systems, which we reported on earlier this week.

Perhaps more discouraging than the meager number of IPOs is the going rate for acquisitions: Less than half the startups that disclosed their purchase price were able to cash out for more money than their total venture investment.

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  • Julia Herniak

    t seems its harder to get investor money for start-ups. Especially internet based companies. Luckily for us, our social shopping website http://www.zovue.com was able to get investor money, and we still seem to get investors interested in more investments.
    Zovue.com is a photo sharing, video sharing and web page sharing website. Its a great tool for advertisers because they can upload their magazine style ad, for much cheaper than inserting them into a magazine.

    So we didn't have a problem getting investors interested because of all the potential in the company.

    Maybe because we have a patent on social shopping:http://www.freepatentsonline.c...

    Although it helps to have a patent, i don't know how it will be when we go for an IPO in the next 2 years.