IPO-VIEW-Venture capital firms behind cream of IPO crop

By Lilla Zuill

NEW YORK, Nov 30 (Reuters) - Venture capital firms have emerged from behind private equity's shadow to take a starring role in the year's best performing U.S. initial public offerings.

In a top-ten list, measured by first day IPO performance, about half of the deals were brought to market by venture capitalists, according to data tracker Dealogic.

"Venture capital firms, responsible for the best deals over the years, have been crowded out by private equity," said Scott Sweet, managing partner of research firm IPOboutique.com, but leveraged buyouts are no longer grabbing as many IPO headlines.

"People are no longer willing to pay for debt-ridden companies," said Sweet, of the deals that have floundered as credit markets have tightened.

Venture capital firms, like their LBO counterparts, make investments in companies in hopes of a sizable return when it comes time to cash out, but without the heavy debt component.

Through the first nine months of the year, more than $20 billion had been raised by venture capital funds, according to the National Venture Capital Association (NVCA).

That pales in comparison to the laden coffers of private equity firms, with Blackstone Group (BX.N: Quote, Profile, Research, Stock Buzz) raising about $21 billion for a single fund earlier this year, but Sweet said venture capital's style of smaller investments in growth companies was proving a resilient one.

The average value of a venture-capital sponsored IPO was about $132 million, according to third-quarter figures from NVCA.