I appreciate your optics on Liquidity events and how you tie their absence back to one of your central themes but i feel that in doing so you have overlooked a far more obvious reason as to why we are seeing fewer and fewer IPOs.
If the CMGi era (of which i am an alum by the way!) of cavalierism did one thing, it caused our government here to really gets its noise out of joint.
Comparable to the Telecom act of 1994(?) in significance, where unbundling of loops gave us ubiquitous and commoditized plumbing, Sarbanes Oxley or SBOX as it is sometimes referred to - turned off that gushing detritus of misconceived pump and dump activity and forced the constituent capital players to get real, get honest, or get lost.
Protecting street investors it has done - the reasons as to why are for another topic entirely - but the thundering hurd that traversed the plains of everyday american retirement assets, has now changed course.
Private Equity and hedge funds as an asset class now sit at about 1.8 Trillion under management. As a peripheral constituent that sucks of the hind tit of this behemoth, there are several key markers of change in a SBOX world:
1. It is now extremely hard to get public. (see the vonage S1 and ask how long that took - CMGi days we had S1's in print cue at kinko's)
2. It is now much less attractive to be an executive of a public company (see Lou getsner's interview in business week)
3. It is more frightening than ever banking offerings (see every bulge bracket settling for hundreds of millions on insider offerings etc)
4. It is much harder to convince an unsophisticated but highly jaded public of tech irrational exhuberence.
So - what does this mean? what are the liquidity alternatives for VC and Private equity asset classes?
Create your own marketplace away from such prying eyes. Sell to each other, finacially re-engineer balance sheets, change leverage, improve operating performance, consolidate, re-cap and on and on .....amongst each other.
Cue $22 billion blackstone fund. Cue 4 times more M&A amongst funds, Cue renewed focus on acqusition platforms, Cue billions and billions transacted between funds, away from uncle sam.
These financial vehicles have hit a critcal capitalization mass and have created liquidity amongst each other in an unprecedented way.