Monday, August 20, 2001
With the masses of money being thrown at the private equity
market, it's little surprise that acute concerns remain over upward pressure
this cash can have on valuations for private biotech companies. However, valuations
have come down considerably over the past six to nine months - by 30%-50% on
the closely watched mezzanine rounds, according to some estimates.
The shrinking valuations are making some VCs feel more comfortable
putting some of their dry powder to work, and they are making bankers more sanguine
about the public market's ability to support valuations when the IPO window
opens up. But other VCs still are finding valuations too high.