“Leverage-obsessed Wall Street has been broken for eight years now. Just two years in the late 1990s, 1996 and 1997, saw more IPOs than the last eight years combined. The ratio of mergers and acquisitions to IPOs has gone from roughly 1:1 from 1996 to 2000 to 6:1 during 2001 through 2008.

A $100 million high-growth revenue company is no longer an interesting candidate for an IPO, potentially a $1 billion company with some nurturing and capital. Instead, it becomes a piece of some large company. With its fate no longer in its hands, the company loses its key management and its vision. We are replacing potentially great companies with underperforming divisions of mature companies.

Once Wall Street recovers from its leverage hangover, the $100 million technology company will once again become an attractive investment. Value creation and financial returns will again be aligned.