The internet brought about many changes when it was introduced in 1990. Near the end of the decade, the NASDAQ was trending a steadily upward as a result of the technological influence on existing businesses as well as internet start-ups. As the first internet browser was launched, there was a rapid transition to the internet platform. Even at this early stage, many believed the internet to be the future for communication and commerce. The number of internet users increased from 16 million users in 1995 to 250 million in 1999. Droves of venture capital firms entered the picture, offering large sums of capital in exchange for equity in technology companies. Many of these investors provided funding with the intension of selling off stock at over inflated prices once the company went public. Those who didn’t sell early experienced substantial losses.
There were 45 technology IPOs in 2013, and an even greater number is expected in 2014. Nearly 600 technology firms, each with a value of $100 million or greater, have planned IPOs for 2014. An additional 30 companies valued at more than $1 billion each are also planning IPOs. A few of the more predominant tech firms valued in the billions include King, Dropbox and Alibaba. Their growth potential makes them exceptionally attractive for investors.
As with all IPOs, some technology companies will fail while others will go on to be tremendously successful. Tech start-up firms are an excellent alternative for those looking to exit finance opportunities. They are expected to generate the fastest growing businesses opportunities over the next couple of years. There is no sure way to determine which companies will be profitable, or how long the current uptrend will last. Careful assessment of company metrics, sensible risk management and properly timing profit taking will pay off handsomely.