While the past year has not seen the sort of mega-acquisitions that made headlines in 2006, the IPO and merger & acquisition data from Israel's hi-tech industry still indicate that the sector is showing robust performance. In 2006, such deals as the acquisition of Mercury Interactive Ltd. by Hewlett-Packard for $4.5 billion were the talk of the trade, in a year that saw $10.6b. spent in 76 deals. The numbers for 2007, as recently released by research firm Israel Venture Capital, fall well short of that mark dropping, 67 percent to $3.2b. But a more long-term look at the statistics show that it was 2006 that was the exception to the rule. In fact, last year's results were the second best - after 2006 - since the heyday of the dot-com bubble in 2000. That 2007 was a stable period of growth in hi-tech is also borne out by the IPO data, which shows that the $1.9b. raised in 32 initial public offerings's was par for the course. That's certainly a far cry from only five years ago, when the dot-com bust brought on a deafening silence, as no Israeli companies went public in 2003. The big question, of course, is how these start-ups will fare in the aftermath of America's subprime crisis and ensuing credit crunch. Israel Venture Capital's Guy Holtzman thinks that the global financial situation will mean fewer IPO's for 2008. "In times of uncertainty in capital markets, exits generally take place through M&A transactions rather than IPOs," he said. This is a field that has seen many Israeli companies rush to the stock exchanges to share their good news with the world, only to fizzle away, so the recent crisis may encourage some welcome discretion. According to the VC Indicator Survey, released last year by the accounting firm Deloitte Brightman Almagor and conducted among the country's leading VC firms, 81% of those surveyed said Israeli companies that went public on Nasdaq tended to do so too early. The alternative to an IPO for Israel's small start-ups, who may see their venture capital sources dry up as a consequence of worldwide trends, would be to seek security of selling out to a large firm. The prospect of recession may actually encourage some Silicon Valley giants to come bargain hunting for innovative Israeli firms ready to sell on the cheap.