Technology IPOs taking center stage.

• Author: Sill, Igor
• Position: TECH STRATEGY - Intial public offerings

To many venture fund investors, the silver lining last year was Wall Street's initial public stock issuance of shares of Linkedln, Groupon, Pandora, Zynga, Zillow and Impreva. But this year's huge pot of gold lies at the end of the rainbow with Facebook's IPO debut.

After languishing for years because of the global financial crisis, euro zone concerns, poor governmental economic policy and continued stock and bond market volatility, a revitalized initial public offering market has begun registering healthy returns for venture investors.

Existing venture funds are being deployed, new funds are being raised and investor allocations to venture capital are clearly on the increase.

As a result of the recent strong IPO market venture capital has garnered renewed investor interest. These alternative asset investments continue to deliver positive returns at a better rate than public market indexes such as Nasdaq or S&P, which delivered zero percent in 2011. It's nice to have intrinsic investment alternatives with the ever-changing capital markets.

While the tremendous success of Linkedln's public market debut remains fresh on investor minds, it is Facebook's upcoming IPO that may very well change the landscape forever. Facebook will change history by becoming the most valuable IPO for a technology company.

In contrast to Google Inc.'s $1.7 billion IPO in 2004--at that time the largest by any U.S. technology company--Facebook's IPO is projected to raise $5-10 billion.

Linkedln shares skyrocketed to a high of $92.99 per share from its May 2011 opening of $45, establishing a market value of $8.9 billion virtually overnight. Zillow climbed 80 percent to $35.77 on its first day of trading and joined other recent IPOs--among them Renren, Yandex NV and Home-Away--in gaining at least 49 percent in first-day trading last year.

Imperva, another venture-backed Internet company, went public at $1 8 and its shares now trade around $35, giving it a market capitalization of $800 million. Zipcar jumped 66 percent over its IPO price on its first day of trading. Investors are flocking to those few Internet offerings after some have far outpaced the average gain of about 7 percent in all Wall Street IPOs in 2011, according to data compiled by Bloomberg.

The technology sector led on trading volume, with 44 companies going public last year. With Facebook's IPO raising some $5 billion on a $50 billion market valuation, it will use the money to finance its impressive...