Short answer, they have to.
From Greentech's Cleantech Investing:
As an active investor in the cleantech market I'm definitely hoping we can start to see some successful exits. I, like others, am pining for a few successful IPOs with stellar returns that can be good beacons of hope for the rest of the sector's bets. When there were practically zero venture-backed IPOs across all sectors, you knew there was a backlog of cleantech companies that were lining up to IPO and couldn't. And of course now that the IPO window is re-opened slightly, it's not surprising to see venture-backed cleantech startups jumping in and filing to go public.
But why are THESE the ones that are doing so? A123, Codexis, Tesla, Amyris, PetroAlgae, Gevo... Several with no or little revenue, really looking to 2012 or beyond for their significant revenue growth. Not all bad companies, that's certainly not my point, some on this list may end up being very successful. But certainly not the exact same short list one would have come up with a year ago when guessing which companies would be READY (note: not WANTING) to IPO as soon as the IPO window reopened. And certainly a couple of stories with some real hair on them.
So why these companies? I'm increasingly believing that these companies aren't IPOing as a result of the same reasons dotcom startups were IPOing in 1999. It's not that there's overexuberance, and investors and management are eager to put companies out into the market too early simply because they know they can get great returns from an overly optimistic stock market eager to get a piece of the Next Big Thing.
No, these companies are IPOing because they pretty much have to. The current investors are fatigued, new venture funders are hard to find, the companies are burning cash very quickly, and with the IPO window open getting another venture financing round from the stock market seems the best solution. Even if the IPO isn't primed to "pop" and be a great IPO story. And in some cases, when you dive into the details of the S-1, you see that the existing funders have put the company in a position where it's IPO or else...MORE