As Venture-Backed IPOs Remain Closed, Qualcomm and Google Execs Offer Some M&A Advice to Startup CEOs

9/17/09Follow @bvbigelow

The keynote speech that former SEC chairman Christopher Cox delivered yesterday at San Diego’s Seventh Annual Venture Summit was billed as a look at the conditions necessary for the IPO window to reopen, a topic of keen interest to scores of VC partners in the audience.

But Cox’s main theme was really focused on the unprecedented scale of the government’s $14 trillion Wall Street bailout and how it has imperiled the U.S. economy. He left the impression the IPO market won’t be warming up anytime soon. So, after the luncheon, it was only natural for attendees to show high interest in two panel discussions that focused on mergers and acquisitions (one for the life sciences sector and one for technology).

The consensus? Cautious optimism—at least in the session I attended on technology M&As. Executives from Qualcomm and Google agreed that the overall economy seems to be stabilizing, and the climate for corporate buyouts of technology startups has been improving.

“From Google’s perspective, it appears that the worst is over,” said Karim Faris, who joined Google’s corporate development team in 2008.

The half-day summit was organized by the San Diego Venture Group, a non-profit networking group for the venture community and service providers. More than 550 people registered for the event, according to Peter Shaw, who is president of the group’s board (and a freshly recruited Xconomist). Shaw told me this year’s summit was the venture group’s “most ambitious ever” because they never before hosted a high-profile speaker like Cox, or dual-track panel discussions.

If anything, however, the former SEC chairman’s talk only underscored how crucial buyouts have become for venture firms to realize some return on their investments. “A real imbalance in the supply and demand for cash has required all of us to become … Next Page »

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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