Accel Partners’ Jim Breyer said if it were up to him he wouldn’t take LinkedIn Corp. public now.
“I don’t think there’s any rush to go to the public markets,” said Breyer in an interview with Bloomberg Television today at the World Economic Forum in Davos, Switzerland. “Certainly the advice we give our CEOs is ‘Take time, remain private as long as you can, build the business, build the profitability.’”
LinkedIn, based in Mountain View, California, said yesterday it plans to raise as much as $175 million in an initial public offering. Shares of the social networking site for professionals are being auctioned at valuation of almost $3 billion by the private exchange SharesPost, three people familiar with the matter said last week.
While LinkedIn’s IPO will “not be a flop,” a valuation of anything more than $3 billion would be “a reasonably high price,” Breyer said. “We see a lot of deals that are priced for perfection today.”
Breyer is the managing partner of Palo Alto, California-based venture capital firm Accel Partners. He has invested in more than thirty companies, including $12.7 million in Facebook Inc. in 2005 and a stake in Groupon Inc., which are both still privately held. Last year, Fortune Magazine named Breyer the top 10 smartest investors in technology.
“There’s always a danger” of another technology bubble, similar to the late 1990s, Breyer said.
Breyer declined to comment on the valuations of Facebook or Groupon. He cited Netflix Inc., which delivers movies online and DVDs by mail, as an example of a company where investor enthusiasm may be driving valuation too high. Netflix shares have risen more than fivefold in the past two years and has a market value of about $11 billion.
“Does it deserve the kinds of valuations that it’s currently seeing? God Knows,” Breyer said. “At some point you lighten up and take a breath and let the company execute and don’t try to jump in.”