Tag Archives: IPO

May 28, 2012 The New Yorker

On May 28, 2012 The New Yorker’s James Surowiecki wrote “Unequal Shares” about Facebook’s Mark Zuckerberg creating two classes of shares in the IPO in what is called a dual class structure. Google, Groupon, LinkedIn,¬†Yelp and Zynga did the same when it went public. It is a strategy to keep control of a company and avoid short term pressure from investors but the stock can under perform in the market. IPOs are not as attractive as remaining private or being bought by another company.

Copyright 2012 DJ Cline All rights reserved.

Jul. 26, 2011 SVForum PWC Biotech

On July 26, 2011 in Palo Alto, SVForum with Pillsbury Winthrop and PricewaterhouseCoopers held their Quarterly Venture Breakfast on Biotech. Tom Thomas of Pillsbury Winthrop moderated panelists Steve Bengston of PricewaterhouseCoopers, Casper de Clercq of Norwest Venture Partners, Jonathan MacQuitty of Abingworth Venture Capital and Eric Shiozaki of Apposite Capital.

Developing drugs can be a slower and uncertain process in America than launching in Europe. Despite that, venture capitalists are still plowing what looks like an unsustainable amount of early stage funding into biotech. Savvy investors look for later rounds after new drugs or devices pass FDA scrutiny, which has become a financial gauntlet for small startups. A growing number of clinical trials are taking place in emerging economies but less regulation means less reliable results. This outsourcing risks losing America’s ability to develop drugs domestically. It also is slowing and some cases stopping new products from reaching patients.

The exits are more likely a buyout from a big pharmaceutical company than an IPO. Many of the pharma giants are looking for something to replace their expiring patents next month. Investing in new life saving drugs is as risky as taking them.

Copyright 2011 DJ Cline All rights reserved.