Are we in a new Internet bubble? And will it burst, like the last one?

More to the point, when will it burst?

Liquidity is clearly improving in the venture capital market, making it easier for investors to cash out their investments.

During the third quarter, there were 111 venture-capital backed company exits, netting $6.4 billion. The number of exits rose by 11 percent while deal volume surged 70 percent compared to the same quarter a year ago, according to Dow Jones VentureSource.

It’s a trend that many may have noticed on some level, but few have actually pointed out. Fewer and fewer start-ups are aiming for an IPO. More and more the goal is to sell out to someone larger, who can move the company to the next level or bolt it onto their existing infrastructure.

However, venture capital available to start-ups and later-stage developments is continuing to grow at a rapid pace. Some of the biggest VC deals in the second quarter this year were in the range of hundreds of millions of dollars.

The IPO market continues to rebound. A total of 10 companies went public in July following 12 the prior month.

Altogether, there have been 74 IPOs, year-to-date, through July, up nearly 370 percent from the prior year, according to Greenwich, Ct.-based IPO research firm Renaissance Capital.

Venture capital fundraising in the US is at the lowest level in seven years and the likelihood that it will significantly increase in the next few years is slim.

Thirty eight US venture capital funds raised $1.9 billion in the second quarter of 2010, the worst three-month period since the third quarter of 2003, according to Thomson Reuters and the National Venture Capital Association.

Corporate governance can make or break an IPO, according to advisory firm KPMG. Governance topped the ranking of biggest headaches faced by companies preparing to go public, recent KPMG surveys found. And Aamir Husain, national leader for IPO Services at KPMG, says that corporate governance can be such an issue that it can kill an IPO.

The work involved in improving corporate governance can be overwhelming and complex. There is compliance with SarbOx, quarterly reports with the SEC, the annual 10k, robust auditing and internal controls -- numerous systems and processes that need to be in place.

The venture capital business is trying to battle back, but with mixed success.

On one hand, during the second quarter, 15 IPOs by venture-backed companies raised $899 million, up from just three offerings which raised $232 million in the same period last year, according to Dow Jones VentureSource.

As companies continue with global restructuring, spin-offs are increasingly being used to slim down and focus on central businesses, bring in some capital, and help the individual businesses to build market value separately. Whether through an IPO, an MBO, an LBO or simply by issuing shares to current shareholders, US and global companies are shedding assets left and right.

Lockheed Martin is restructuring to change its focus on long-term growth, and the company is putting some less-strategic units up for sale as part of the process. Most of its Enterprise Integration Group and its Pacific Architects and Engineers unit--both now falling under its Information Systems & Global Services business—will be spun off. In addition, as the firm tightens its focus within the defence sector, the divestitures are also part of a move to comply with recently-drafted Pentagon conflict of interest rules for contractors, according to the company.

Is the stock market once again safe for IPOs?

A number of companies seem to think so, given the current calendar.

The $1.3 billion acquisition of Bresnan Communications by Cablevision Monday is the latest instance of a private equity firm unloading a portfolio company, illustrating the rebound in PE activity over last year, especially with PE firms on the sellside of transactions.

It follows the $4 billion acquisition last week of Talecris Biotherapeutics, a portfolio company of Cerberus Capital Management, by Barcelona-based Grifols.