What Ever Happened To Michigan High Tech IPOs?
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doesn’t come naturally to Michiganders because their first instinct is to work for big companies. By that logic, it’s natural to assume local entrepreneurs would prefer to eventually sell their technology to those companies than go it alone.
“There’s a difference between building a product and building a company,” Song says.
The IPO market, like the economy in general, is cyclical. And there are signs that it’s coming back to life. The IPO pipeline, which slowed to a trickle in 2008 (when just six companies went public nationwide), rebounded significantly during the last three months of 2010, as 57 companies went public and 56 others registered for IPOs, according to Ernst & Young.
The professional networking site LinkedIn recently filed plans to raise as much as $275 million and there’s rampant speculation about eventual public offerings by Facebook, Twitter, and Groupon.
So the question is, when the IPO recaptures its former mojo, will Michigan startups jump on board?
I doubt it, though a bull market can sometimes do funny things to otherwise conservative people. And there are some good local candidates for an eventual IPO-one investor told me he could see Esperion Therapeutics or Lycera take the plunge.
For now at least, Michigan startups seem content to pass the baton to someone else. And that’s not necessarily a bad thing, as entrepreneurs can use their new riches from an acquisition to launch other startups. And it’s just as easy for outsiders to invest in Michigan and create jobs as for homegrown businesses that grew organically.
“Michigan has done reasonably well attracting companies, based on economic incentives the state is willing to provide,” says Jon Lauckner, president of GM Ventures.
But I’d argue IPO is more than just money or jobs. A state whose homegrown companies command the attention of Wall Street will reap benefits (talent, capital, publicity) long after an entrepreneur sells his dream to the highest bidder.