I always try to think about opportunities when the going gets though. So in the economic crisis time 2008 and 2009 have turned out to be, what are you todo?
I think when things are though, and problems are real and hard, is when the entrepreneurs get to work. And create brilliant business, solve it.
The credit crunch combined with the though regulatory framework here in the US, has really halted the Silicon Valley IPO’s. The other week OpenTable went public, and was off to a good start (59% up in the first day), but this was really the first Silicon Valley IPO in about 1,5 year.
But the exit-path for angel investors and VC’s is still very though, and this also means it’s tough, to use stock-option programs to keep the talent in the startups here in the valley.
This has created a number of new exit paths, and liquidity platforms for the startups, one of which is Tim Draper’s Xchange, Inc. To be traded here on the XPO (XChange Private Offering), you need to have at least $ 20 M in revenues, and there is a large number of potential companies that are interested.The XPO uses a Dutch auction system to set the prices (a very interesting touch IMHO). Companies with less than € 20 M in revenues are restriced to the XIQ (XChange InQuest) , which is less of an trading platform, and more of a buyer/seller matching platform, simply put somewhat like an classified ad board for shares (the difference in effect is small, except the dutch auction style pricing, but I guess the regulatory issues might be quite different between these two).
It will be interesting to follow this development, and I think there is much room for more players in this segment, all from very small cap companies to more large cap companies on different trading platforms, with companies in different stages of risk. Much as we have seen in Sweden’s many small cap trading lists, with both some really good results (with mobile tech companies such as MobiSpine (on AktieTorget) and some examples that have had some controversy to it.
Here in the US (and Silicon Valley) I think it all depends on how SEC and the new administration will see these things. As something that spark glow into healthy parts of the economy eco-system, or as something that needs to be heavy regulated.
UPDATED: Some feedback Tim Draper (the company name is actually XChange not Exchanged, my mistake), and I elaborated a bit on the difference between XPO and XIQ offered by XChange, Inc.