Today’s Wall Street Journal article about the Silicon Valley start-ups readying themselves to go public signals the reopening — finally! — of the IPO “window.” It’ about time! This has been the longest drought I’ve experienced since I got to the Valley in 1981, and it was historic by any measure.

The notion of a “window” is that there are good times and bad times to take a company public. It mainly has to do with the receptivity of capital markets investors to new issues by unproven companies. When they are in a buying mood, the window is said to be open, and vice versa.

The window has been all-but closed since about 2002 (it never slams shut, it just gets so small that only the strongest companies can get through, such as Google and more recently, LinkedIn). There was good reason, too — 2002 was when the dying embers of Internet bubble finally went out, and lots of people were feeling burned and in no mood to buy shares of unproven, unprofitable web 1.0 companies (furniture.com anyone?).

Now, though, memories have faded, the appetite for new issues has returned and a handful of companies such as Splunk, Infoblox, Workday and ServiceNow are getting ready to test the waters.

If this first batch is successful in going public, you can be sure that many more companies will file in a rush to take advantage.

 

There is no one way to communicate with investors anymore, especially not public market investors. You’ve got to use all the commonly accepted forms of communication if you hope to reach anywhere near 100% of your target audience.

To that end, don’t forget video. Lots of companies are already doing video releases about their financial results — enough so that Investor Relations magazine just wrote a story about it. And they were kind enough to quote me in it. So here’s my quote and here’s a link to the whole story.

Jon Greer, managing director of San Francisco’s Jon Greer Consulting, an investor communications and media training firm, is more blunt. ‘I don’t think you’re ever going to see video shot by IROs themselves in investor communications,’ he predicts. ‘Go polished; it doesn’t have to cost a lot.’

Greer concedes ‘there’s a lot of learning to be done’ by PR and IR people. They should know about video fundamentals and be able to select vendors but they should stick to spokesperson training, such as doing mock shoots with professional cameramen.

It’s no secret in the world of venture capital and private equity  that it’s not easy right now to raise new money to invest in portfolio companies. But at the PEI Investor Relations and Communications Forum last week, I picked up some interesting datapoints from Alexander Leykikh, a partner with Atlantic-Pacific Capital, a placement agent [meaning they raise money for private equity and venture capital funds for a fee]

He said that VCs and PE fund managers had been expecting a 25% reduction in the money committed to their funds by institutional investors, but that in reality, investors are cutting back by more like a 50% reduction. Furthermore, he added that only 75-80% of limited partners (investors) are re-upping.

Dan Primack on peHUB reported some data today about one fund that certainly seems to bear-out this trend. He reported that Polaris Venture Partners, which last raised a $1 billion fund, initially reduced its target for its latest fund to $500 million, but has since lowered it again to $400 million, and according to a regulatory filing, they’ve only raised $233 million it to date.

It’s not unusual for the general partners of venture capital and private equity firms to take their investors, known as limited partners, for granted. One reason may be structure: once the LPs have committed to invest, they are contractually bound to do so for as long as a decade or more. Another may be that LPs have traditionally been fairly passive in managing their investments and relationships.

Like a lot of things in the economy, the LP-GP relationship is changing, particularly in the area of LP relations. LPs are getting more demanding, of both the time and attention of their general partners.

I’m at the PEI Investor Relations and Communications Forum in New York, and this is one of the biggest topics of discussion.

“LPs appreciate having you ask ‘how are we doing,’” said Mark Barnhill of Platinum Equity. Barnhill added that LPs appreciate having access to investing partners, and keeping them fully informed about developments at the fund and at the fund’s portfolio investments.

The last thing LPs want is to be surprised, or to hear about something from someone else before hearing about it from their GPs.

Bottom line: communicate, communicate, communicate. Keep your LPs informed before, during and after you take their investment. In these times, when LPs have an infinite number of private equity options, you can’t go wrong using communications as a relationship-building tool.

Update on my earlier post about the lame job being done by Apple and its board regarding Steve Jobs’ illness: according to Bloomberg, the SEC is looking into Apple’s recent disclosures “to insure investors weren’t misled.”