Want to know why venture capitalists so long for initial public offerings as an exit for their portfolio companies? Further, why do some of the VCs hang on to some of their ownership share?
Just take a look at the bidding war for Data Domain (Nasdaq: DDUP), which EMC (NYSE: EMC) is paying $2.2 billion in cash for, outbidding NetApp (Nasdaq: NTAP)).
Scott Austin, blogger at the Wall Street Journal’s “Venture Dispatch,” tracked New Enterprise Associates’ investment in Data Domain came came to this conclusion:
“Total tally: NEA made an estimated $386 million, more than 30 times the original investment of $12.6 million.”
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