Data just out shows that Q3 was a great quarter for M&A. As you can see from the charts below total deal value and average deal size were up quarter on quarter and year on year and deal volumes are also pretty robust. On top of that Groupon finally went public (pricing at $20, above its expected range of $16-18), Zynga is expected to list after Thanksgiving, and Yelp announced this week that they have appointed bankers and are expected to IPO in Q1.
Exits are what make the venture world go round and whilst they are still happening the market will stay buoyant. There has been a lot of talk this week about whether appetite is drying up for Series A deals, but whilst the exits keep coming I wouldn’t expect to see any radical shifts. Sure, investors will get smarter (learning again that eyeballs and growth aren’t always lead indicators of value) and the macro environment might make them more cautious, but it will take a collapse in the exit market to really change behaviour.