Tech IPO Wave Coming, Says VC Who Lived Through The Last One

Deepak Kamra has been a venture capitalist in Silicon Valley since the early 1990s, and he thinks tech is heading for the kind of IPO wave that hasn’t been seen since the dot-com boom.

“The question,” he asks, “is whether we’re in 1997 or 2000.”

In December 1996, then-Fed chief Alan Greenspan warned of “irrational exuberance” and cautioned investors to look more closely at price-to-earnings ratios. In fact, the tech-heavy NASDAQ went up nearly 400% from that point, peaking in spring 2000. Investors who followed Greenspan’s warning missed out on one the greatest stock market run-ups in history.

In his early days at Canaan Partners, Kamra led investments in online dating service and advertising pioneer DoubleClick, and the current frenzy over Facebook and Groupon — as well as freeway traffic and high house prices in Silicon Valley — reminds him of those days.

The current runup has been driven by private investors rather than big offerings on the public market, but Kamra thinks that will change in 2011 or 2012 as Groupon goes public, followed by Facebook, and possibly LinkedIn and Twitter. All it takes is three or four big IPOs to start another wave.

Kamra does not categorize the current situation as a bubble. Although he wouldn’t invest in Facebook at $50 billion, that’s not a value judgment — it’s simply because Canaan does early- and mid-stage investments, and the current round of investment led by Goldman Sachs is “quasi-public.”

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