The billion-dollar IPO club shows investor concentration

A Facebook application logo is pictured on a mobile phone in this photo illustration taken in Lavigny

Venture capitalists like to cite the number of billion-dollar, venture-backed IPOs to make a point about the venture business. Often the points they make conflict.

Some claim the increasing number of the big deals reflects an improving exit environment and the opportunity of better returns for the venture business looking ahead. Others say their scarcity is a bad sign and an indication of a stratified industry, in which a relatively small number of firms receive the opportunity of oversized returns while the rest of industry struggles.

I am not going to weigh in on either side. But I am going to point out that a search of the Thomson Reuters database found 33 U.S.-based venture-backed companies that completed offerings with post-offering market capitalizations above $1 billion. This covers the years of 2008 to 2013, with the data current as of Dec. 15 this year. (Thomson Reuters is the publisher of peHUB.)

Obviously, the largest offering belongs to Facebook, followed by Twitter and Groupon. By and large, it is indeed a list of exceptional companies. Workday is on it, as is LinkedIn, FireEye, Veeva Systems, Telsa Motors, Splunk and Tableau Software.

There are less exciting companies as well. A123 Systems, for instance, and Zynga.

What’s most interesting is the concentration of investors. Sequoia Capital is the firm in the most deals, participating in eight, according to an analysis of the investor list.

Greylock Partners was in seven and Technology Crossover Ventures and Andreessen Horowitz each had six.

This story first appeared in Reuters Venture Capital Journal. Subscribers can read the entire original story here. To subscribe to VCJ, please email Greg.Winterton@ThomsonReuters.com.

Photo of a Facebook app logo pictured on a mobile phone by REUTERS/Valentin Flauraud.

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