Tengion Inc.’s
initial public offering on Friday harks back to the days when small
venture-backed companies routinely employed boutique investment banks to
escort themselves to the public markets.
The biotechnology company raised $30 million in the IPO, the smallest venture-backed offering since Feb. 19, 2008, when another unprofitable biotech, Bioheart Inc., earned just $5.8 million in proceeds in a slimmed down offering. Tengion is also the first such company since Bioheart to use boutique banks solely as bookrunners - which do the majority of work and collect the largest fees.
A year ago, the National Venture Capital Association urged the venture capital community to hire boutiques to take companies public, much like the industry did during the 1990s, arguing that VCs have relied too heavily on so-called bulge-bracket banks that aren’t interested in smaller companies.
Boutique investment banks can handle smaller transactions that have less appeal to larger banks. They’re also more likely to have staff with specialized experience needed to market offerings from small technology and health care companies to long-term investors, some observers say.
To read the full, original article click on this link: Tengion’s Small “Boutique” IPO A Rarity In Venture World - Venture Capital Dispatch - WSJ
Author: Brian Gormley
