What is the current state of venture capital liquidity in Silicon Valley?

Silicon Valley is experiencing a serious liquidity crisis. While the 1990s averaged 130 IPOs per year for emerging growth companies, recent statistics show only three venture-backed IPOs in the first half of this year. Over 5,000 venture-backed companies funded since 2004 have had no exits (either through IPOs or acquisitions). This represents a broken liquidity cycle that typically operated on a four to six-year timeframe. The situation reflects the impact of the deep recession, which has affected both financial markets and the real economy, creating a liquidity drought in the venture capital sector.