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32% No. 32% Not Sure. 36% Yes. 21 st Century Version of “ 4 Horsemen” Required. Would you consider a boutique I-bank to be the lead book runner for going public on a U.S. stock exchange?. * Source: DCM Analysis /Survey of Venture-Backed Companies, 2009 – Participants ( N) = 108. - PowerPoint PPT Presentation
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DCM • Proprietary and Confidential 1
21st Century Version of “4 Horsemen” Required
Would you consider a boutique I-bank to be the lead book runner for going public
on a U.S. stock exchange?
36%Yes
32%No
32%Not Sure
Total Early stage
Mid stage
Late stage
0%10%20%30%40%50%60%70%80%90%
100%
NoNot sureYes
* Source: DCM Analysis /Survey of Venture-Backed Companies, 2009 – Participants (N) = 108
Emerging Company IPOs on International Exchanges: Additional New Liquidity Sources
Global Venture-Backed IPOs*
* Sources: Thomson Reuters, Venture Source, Zero2IPO, Venture Intelligence** Includes VC- and PE-backed IPOs
Top 3 Compliance Challenges to Going PublicOn U.S. Stock Exchanges
# of Responses Answered as a Top 3 Issue(Participants =108)
6
62
74
80
102Sarbanes-Oxley
Corporate Governance
Regulation Fair Disclosure(Reg FD)
Listing Requirements of U.S. Stock Exchanges
Other
Source: DCM Analysis/Survey of Venture-Backed Companies, 2009
2007 2008
86
6
2007 2008
455
2007 2008
94
35
2006 2007
3 2
**
DCM • Proprietary and Confidential 2
Preferred Exit Route
Likely Exit Route
46%
19%
54%
81%
15
15
33
53
58
74
76
Exit Route Preferenceand Expectation
(n=108)
Top 3 Barriers to Going Public# of Responses Answered as a Top 3 Issue
(Participants = 108)
M&A
IPO
Compliance Requirements (Sarbanes-Oxley, Audit, Governance)
Increased Volatility in the Public Markets
M&A Better Alternative (Faster Process, More Liquidity)
Investment-Banking Related Issues (Analyst Coverage, Requires High Rev Threshold)
Transaction Costs of Going Public (Legal, Banker Fees, Non-Compliance Related Costs)
Higher Perceived Litigation Risk from U.S. Investor Base
Other
Source: DCM Analysis/Survey of Venture-Backed Companies, 2009
Current Regulation Has a Major Impact on How Emerging Companies Consider Their Exit Route
Barriers to Going Public on U.S. Stock Exchanges
DCM • Proprietary and Confidential 3
Top 3 Compliance Challenges to Going Public onU.S. Stock Exchanges
# of Responses Answered as a Top 3 Issue(Participants = 108)
Sarbanes-Oxley
Corporate Governance
Regulation Fair Disclosure(Reg FD)
Listing Requirements of U.S. Stock Exchanges
Other
Source: DCM Analysis/Survey of Venture-Backed Companies, 2009
Emerging Companies Need Right-Sized Compliance Requirements to Thrive
102
80
74
62
6
Cost of Compliance Is Prohibitive for
Small Companies
DCM • Proprietary and Confidential 4
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