Funding

Big Firms are Giving Smaller VCs Exit Envy

big dog little puppy Big Firms are Giving Smaller VCs Exit Envy

I eat IPOs like yours for breakfast.

Betabeat has already noted the prevailing winds of venture capital class warfare–with equity in hot start-ups, access to dealflow, and ability to raise capital separates “the haves from the have nots.” But as the IPO wave has started to crest, even fewer names have risen to the top. And if the Wall Street Journal‘s numbers are any indicator, it’s given some VCs cause for a little reverse schadenfreude.

“Top venture-capital firms Accel Partners, Sequoia Capital and Redpoint Ventures have the biggest volume of initial public offerings and sales of start-ups so far this year, according to an analysis by VentureSource, with all three firms each notching at least nine such ‘exits’ in the first half of 2011. In contrast, more than 200 venture firms have had only one exit each so far this year, with scores of others having none.”

What’s more, returns at the very top have likewise “widened” over other reputable performers “by two to three times” this year, Mel Williams from TrueBridge Capital Partners, a firm that invests in VC funds, tells the Journal. “A handful of managers are clearly distancing themselves from the pack.”

Impending IPOs from Kayak (backed by Sequoia and Accel), Zillow (backed by Benchmark), and Groupon (backed by Accel, among many others) all stand to make them even richer. Maybe they can use it to buy some stock in Zynga, the one company the top six VCs in terms of IPOs and M&As, missed out on, while Fred Wilson chuckles to himself.

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