The lack of IPO activity in the tech sector is making it much more difficult to judge what high-valuation start-ups are actually worth, one investor said at a technology panel Monday.
Chris Douvos, managing director and general partner at Venture Investment Associates, graphically described the lack of IPO activity as an "exit sphincter" leaving LPs, investors that fund venture capital funds, out of money to reinvest. Douvos' comments came at a Monday panel at TechCrunch Disrupt in New York City.
Only 51 IPOs priced in the second half of 2015, the smallest batch since 2012, according to Proskauer's Capital Markets Group's 2016 IPO study. The first half of 2016 is on track to add even fewer.