VCJ’s Year in Review: Pivots and IPOs

I’m ready to declare 2011 as the year of the pivot. I haven’t kept any stats on it, but the term “pivot” came up at least once a week. Or so it seemed.

Sometimes, it was in the negative context of, say, a Color Labs and what that company was going to do now with the $41 million it raised last year.

But the term usually was mentioned alongside a successful fundraise, like that of Kabam, f.k.a. Watercooler, which raised $115 million in two rounds in 2011 from VCs following its pivot. (Although it was a large financing, it wasn’t enough to rank in the top 10 VC tech investments in 2011.)

The word “pivot” even has its own spokesperson—Eric Ries, author of the must-read book “The Lean Startup.” I had a chance to hear him speak at a Box event in November, in which he talked briefly about the importance of knowing that a pivot is a change in strategy without necessarily a change in vision. If you haven’t already done so, then make 2012 the year you check out his website or read his book.

If pivot was the catchphrase of the year, then maybe the most-used abbreviation of 2011—outside of LOL on all of our social media posts and tweets—has to be IPO.

It was the year of the IPO in 2011, which is somewhat remarkable to say, considering that only 52 VC-backed companies went public in 2011, compared to 74 the year before.

However, the amount raised easily topped the year before. The 52 newly public companies in 2011 raised about $10 billion, compared to more than $7.4 billion in proceeds that the 74 VC-backed IPOs raised in 2010.

And it wasn’t just the amount that was raised, it was who: Familiar names like LinkedIn, Groupon, Zynga, Pandora, HomeAway, Zipcar, Fusion-io and The Active Network, among several Chinese companies and others from around the world, such as Renren, Gevo and Tudou and Yandex.

However, as Venture Capital Journal reported in its Year in Review issue, which came out today, the aftermarket performance of the VC-backed IPOs was not so good. Despite some first-day trading pops, most newly public companies in 2011 were trading well below their post-IPO peaks as of late December. And many have seen their shares fall below their IPO price.

Still, in looking back at 2011, it was the year of the IPO, and as we hang up new calendars and look ahead to the next 12 months, the talk of Facebook going public, perhaps in the summer, is taking hold. Plenty of other companies also are looking at their IPO prospects, especially as a bill introduced to the U.S. Senate in late November would make it easier for small companies to go IPO.

I predict more companies will go public in 2012 than in 2011, fueled by the Facebook-effect and the potential regulatory changes.

That is, of course, unless the companies pivot and decide to do something else.

In the meantime, VCJ has assembled a number of stories in the January 2012 issue, our Year in Review special edition.

Subscribers can click on the links below. If you’re not a subscriber, Click here for a free trial.

Happy New Year! And I look forward to hearing from you in 2012.

Year in Review by Danielle Fugazy

VC-Backed IPOs Raise Nearly $10B by Joanna Glasner

How to Smooth the Path to IPOs by Mark Boslet

Fundraising Rebounded Before Stalling by Danielle Fugazy

Salesforce, Medtronic Drove Corporate-Backed M&A by Danielle Fugazy

The New Trend: Acquisitions to Hire Talent by Constance Loizos

Keeping the Faith by Mark Boslet

VC Funding Doubles for Online Retail by Sarah McBride

Feeling Safe and Optimistic Backing Security by Tom York

High-Flying Internet Valuations Due to Fall by Tom Stein

A Young Turkey Matures by Tom Stein

Optimism Rises in Parts of Latin America by Ivan Castano

BRIC-by-BRIC Brazil and Russia Emerge by Joanna Glasner

2011: The Year of Accelerating Innovation on the Social, Mobile and Cloud Architecture by Scott Maxwell

(Photo by Tom Wang/Shutterstock)