« US Giants Buy Two Euro Photo Software Startups in Past 2 Days | Main | Austrian RFID Firm Raising $15M »
June 28, 2006
US VC Makes The Case For London And Toronto
In a guest column in PE Week Wire, Charley Lax, managing general partner of GrandBanks Capital, an early stage VC writes (with a bit of irony) that London's AIM and Toronto's TSE may be a way to get around the issues with Nasdaq and tech IPOs.
On his firm's website, Lax describes himself as a retired big-wall climber, now an enthusiastic but challenged golfer ... and an internationally recognized cigar aficionado
It is the latter that holds the VC back from wholeheartedly supporting London and Toronto as the places to float. Both cities have bylaws about no-smoking in public places.
With the Nasdaq looking less and less open to venture-backed companies, investors can make congressional leaders sit up by exploring liquidity options outside of our borders, such as the London AIM Exchange, the Toronto Stock Exchange or the Japanese markets. If we threaten to take our money and our companies away from our native soil, then will Washington react? ... SOX has effectively killed the classic U.S. technology IPO. Without a viable U.S. IPO market, our emerging growth technology companies are severely disadvantaged particularly against the growing competition from India and China. Top acquirers like Cisco, Microsoft, EMC and Symantec all smell the decline of the public market even through my heavy cigar smoke, and do not offer the IPO valuation premiums that we usually seek when pursuing M&A. This results in our portfolio companies suffering from a decline in exit valuations. These acquirers need to recognize that we do indeed have public market options and London’s AIM is among those paths that we are pursuing.
We are not so sure that London or Toronto can offer a better exit opportunity for US technology firms, but we do know that those no-smoking bylaws should not be too much of a deterrent. They are adhered to most strongly in the tourist areas. And we're sure London's investment bankers will know where Mr Lax can enjoy his Monte Cristo in peace.
Read - Guest Column (PE Week Wire)
Posted on June 28, 2006 01:11 PM | Posted to | Permalink
Trackback Pings
TrackBack URL for this entry:
http://www.thealarmclock.com/mt/mt-tb.cgi/1478
