Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

IPOs: Mary Meeker's Move To VC - And The Lack Of Wall Street Analysts

Posted by Tom Foremski - November 29, 2010

Mary Meeker, one of the top Wall Street analysts, has moved to Kleiner Perkins Caufield & Byers from Morgan Stanley.

Sarah Lacy reports:

Chegg's CEO Dan Rosensweig was one of many pinging Meeker with congratulatory notes this morning during my call with Meeker, Doerr and fellow KP partner Ted Schlein. He described it as "huge news" and a "big coup" for Kleiner.

"Mary's ability to spot the most important trends, evaluate-and-back the most effective entrepreneurs, predict the major pivots in the industry, and do it on a global basis has been unparalleled," he told TechCrunch via email.

While this is likely a lucrative move for Ms Meeker this is not good news for the return of the IPO market. The valuable role that Ms Meeker played in her "ability to spot the most important trends, evaluate-and-back the most effective entrepreneurs, predict the major pivots in the industry, and do it on a global basis" used to benefit the investors in public companies.

Now that benefit will go to a select group of elite investors in private companies.

However, if the IPO market is to return, and in turn, help fuel reinvestment in Silicon Valley startups by VCs such as Kleiner, Wall Street needs more Mary Meekers -- not fewer. One of the biggest problems public companies have is in having enough analysts following them and writing insightful investment reports.

Even large public companies such as Intel have problems in attracting enough analysts that understand their business. Newly public companies face an uphill battle in attracting analysts that know them and their markets. With the carnage among Wall Street analysts following the financial meltdown two years ago, the need for good analysts is even more acute today.

Kleiner could be shooting itself in the foot. The firm needs people like Ms Meeker on Wall Street talking about its public or soon-to-be-public companies, and helping to create the markets for that stock.

It's superstar analysts such as Ms Meeker that create the trading markets for public companies.


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