From Alan Patricof in the NYT:
The sum and substance of all of these developments is that the minimum economic level to bring a company public today is at least a $50 million offering at a $250 million market value. With realism back in the market and a return to rational metrics, like multiples of revenues and, better yet, profits, venture capitalists have had to face the hard reality that it is highly unlikely that taking a company from start-up to a point where it can justify this type of market capitalization in a three-, five- and even seven-year time frame is realistic, except in a limited number of situations.
For these reasons, I believe that the paradigm has changed for the venture business. We can no longer realistically expect the same kinds of absolute returns that were achieved in the past through a quick turnaround from start-up to liquidity through an I.P.O. Rather, I believe that most of the companies that venture capitalists are funding today will find an exit through merger or acquisition. And if we expect to achieve a return in a reasonable time frame of three to five years, we are probably looking at a sale price of $20 million to $100 million. This is the valuation range where most young companies are being acquired.