Ron Conway on When the IPO Market Will Re-Emerge

While OpenTable had a very successful IPO yesterday, the IPO market might not open up for other tech startups for at least another year, says prolific Silicon Valley investor Ron Conway. He made the assessment in a video interview with Vator.tv’s Bambi Francisco on mobile startups, republished below.

Questioned on when he sees the IPO market open up again, Conway responds that he thinks we are at least one year away. He’s more bullish on the M&A market picking up again, expressing the hope that this is only six months away.

In the rest of the interview, Conway mostly talks up some of the 130 startups he’s invested in to date, although interestingly he reveals that he’s not on Facebook or Twitter because he doesn’t have the time for any of these services.

He also claims two of his portfolio companies, Admob and Digg, could one day go public. But that’s at least a year away.

OpenTable IPO Soars 59%

OpenTable’s successful IPO should give startups and VCs a sign of hope that you can still go public if you have a real business.OpenTable was up 59% from its initial offering price of $20. With 21.6 M shares outstanding, this gives OpenTable an initial market cap of ~$689M. See more detailed information here.

If you are not familiar with OpenTable: OpenTable delivers reservation management software to restaurants through a Web browser and collects monthly subscription revenues. In many respects, it is in the same class of software companies as Salesforce—selling software as a service over the Web to business customers. But it also has a friendly (free) consumer-facing side. It is yet another example of enterprise and consumer apps merging in the cloud.

OpenTable is a solid Internet company with a proven track record. It generated ~$55.8 M in revenues last year and a net loss of $1 million (largely due to expansion-related costs). In the first quarter of 2009, it managed to turn a net profit of $366,000 on revenues of $16 million.

So what does it take for a tech company to IPO these days? If OpenTable is the new measuring stick, a company needs at least $50 million in revenues, have at least one quarter of profits, customers with proven loyalty, and solid growth potential. In other words, it needs to be a real business.