Poll: How much equity should a VC to sell in an IPO?

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In the venture business, it’s usually a misnomer to refer to an IPO as an exit.

It typically takes several quarters, often years, after a portfolio company goes public for VCs to part with their shares. Ideally, early backers want confidence that public markets are valuing the company sufficiently and can absorb a larger float without dinging share prices.

Sometimes, however, venture investors still aim for a bit of hard cash at IPO time. That’s been the case for a handful of public offerings this year, including Zynga (ZNGA), The Active Network (ACTV), and Yandex (YNDX).

In all those cases, the IPO was principally about raising money for the company, though insiders did unload a small percentage of their holdings:

– In Zynga’s IPO, Union Square Ventures, Foundry Venture Capital, Avalon Ventures and IVP each sold about 7% of their shares.
– In The Active Network’s IPO, Canaan Partners and ESPN each sold about 10% of their stakes.
– For Yandex, Tiger Global Holding sold about 12% of its shares in the offeringand Baring Vostok Private Equity Funds sold about a third of its Class A shares.

While the practice of selling some shares in an IPO isn’t exactly rare, it’s not standard practice either. That leaves me wondering: Is it something that we’re likely to see more of given extended timelines to exit for venture-backed companies? And, if so, how much should investors be looking to sell?

In the following poll, we’re curious to see how such share sales are viewed. Are they a good idea? Problematic? Or, as in many things in life, is it just one of those things that’s complicated.