Fall of the Wall
See below for a preview of GSV’s 2012 white paper “Fall of the Wall”
Read the full report here.
Emerging Investment Theme: Education
When GSV co-founder Michael Moe published The Dawn of the Age of Knowledge in 1996, education companies comprised a minuscule “sector” in the public capital markets -- $19.7 billion out of total public market capitalization of $7.2 trillion – or 0.3% of U.S. public capital markets
Strong IPO activity ensued from 1995 to 2000 with market cap growing at a 30.2% CAGR and achieving $55.6 billion at year end 2000 – but still only 0.5% of U.S. public capital markets
Public market momentum as well as the internet boom undoubtedly strengthened venture and growth investor interest as can be seen by a dramatic rise in investment activity in 1999 and 2000. Deal activity rose from 11 transactions in 1998 to 106 in 1999 with a commensurate rise in dollar flows -- $145 million in 1998 to $1.3 billion in 1999 -- both staggering increases
The “bust” that followed this period had the impact of completely stifling new venture and growth capital investments for nearly a decade after 2001
In the following pages we analyze capital market flows in education from their infancy in 1995 to the 2000 peak, followed by the bust and peak again in 2011