Venture-backed exits trend to continue [pg. 17]

May 7, 2006 02:34
2 minute read.


Dear Reader,
As you can imagine, more people are reading The Jerusalem Post than ever before. Nevertheless, traditional business models are no longer sustainable and high-quality publications, like ours, are being forced to look for new ways to keep going. Unlike many other news organizations, we have not put up a paywall. We want to keep our journalism open and accessible and be able to keep providing you with news and analyses from the frontlines of Israel, the Middle East and the Jewish World.

As one of our loyal readers, we ask you to be our partner.

For $5 a month you will receive access to the following:

  • A user experience almost completely free of ads
  • Access to our Premium Section
  • Content from the award-winning Jerusalem Report and our monthly magazine to learn Hebrew - Ivrit
  • A brand new ePaper featuring the daily newspaper as it appears in print in Israel

Help us grow and continue telling Israel’s story to the world.

Thank you,

Ronit Hasin-Hochman, CEO, Jerusalem Post Group
Yaakov Katz, Editor-in-Chief


A boom of global venture-backed company exits that took off during 2005 has set the stage for a new trend on the back of increased merger and acquisition valuations in Israel and the US and a rise in initial public offerings in Europe. According to Transition, the fourth annual Ernst & Young Venture Capital Insight Report, this growth trend in value and number of venture-backed exits is expected to continue this year and into 2007. "Market demand continues for great companies, including venture-backed companies, both in terms of initial public offerings and acquisitions," said Gil Forer, Global Director of Ernst & Young's Venture Capital Advisory Group. Global venture capital investments reached a volume of $31.3 billion in 2005, of which 93 percent of capital invested was represented by the US, Canada, Europe and Israel. China and India accounted for the remainder. Venture capital firms in the US raised $41b. in new funds over the past two years. European firms closed on €3.7b. in 2005, more than double compared the year before. A significant growing trend, the annual report on the state of the venture capital industry found, is the increase in buy-outs of venture-backed companies by private equity firms, thus providing an "exit" to venture capital investors. "The number of exit options available to venture-backed companies - whether the exchange or the funding vehicle - is increasing, making it more important than ever to allow a company's business imperatives to determine the choice of exit," Forer said. There is a potential exit backlog of 1,912 private venture-backed companies in the US, Europe and Israel according to Ernst & Young estimates. "These companies, with a cumulative $51b. of venture capital invested in them, have not received financing in several years and are maturing from a venture capital perspective," Ernst & Young said, noting that current rates of venture-backed exits call into question the possibility of this many companies finding a timely and successful liquidity event. called into question the possibility of this many companies finding a timely and successful liquidity event. In addition, the report showed continued contraction in the pool of private venture-backed companies in the US, Europe and Israel, rebalancing the venture capital portfolios. The contraction is present mainly in the fields of information services, communications, consumer and business services and retailers, as a result of promising new opportunities in biopharmaceuticals, medical devices, semiconductors, electronics and Web 2.0. Sector by sector analysis showed that biopharmaceutical and software companies continued to dominate venture capital investing in the US, Europe and Israel.

Join Jerusalem Post Premium Plus now for just $5 and upgrade your experience with an ads-free website and exclusive content. Click here>>

Related Content

The Teva Pharmaceutical Industries
April 30, 2015
Teva doubles down on Mylan, despite rejection