Investors search for the next Google

(FSB Magazine) -- The race to create the next Google is accelerating. Initial public offerings by venture-capital backed companies reached a three-year high in May, with 11 companies raising $1.6 billion on U.S. exchanges.

Last month saw the highest number of companies listing IPOs since October 2004, as well as the greatest amount of money raised since August 2004, when Google debuted on the market. The findings came from the National Venture Capital Association and Thompson Financial.

More from FSB

Help wanted for HR firm A CEO and rodeo queen King of the mountain bike

Current Issue

Among the companies that joined the race to go public were AECOM Technology (Charts), a global management and technical support consulting firm in Los Angeles; MetroPCS Communications (Charts), a wireless communications business in Dallas; and TomoTherapy (Charts), a cancer-treatment provider in Madison, Wisc. The IPOs spanned industries including healthcare, information technology and telecom services.

The data suggests that firms that shied away from IPOs in recent years may be reconsidering. "After a 4-5 year period of stagnancy, businesses are healthy enough to go public again," says Tom Crotty, a general partner at Battery Ventures, a backer for MetroPCS. "It's a Darwinian triage process-the companies that survived the hurricane emerged stronger."

Expect to see more solar and clean technology firms joining the IPO crowd in the next few years, says Crotty. "There's a lot of promise in these areas for IPO's," he says, "but they may need more time to mature before going public."