An Initial Public Offering is the process by which a private company sells shares to the general public for the first time, listing on a stock exchange and allowing anyone to buy or sell ownership in the business. Before an IPO, only founders, employees, and institutional investors like venture capital firms and private equity funds can own shares. After an IPO, those shares trade freely on a public exchange.

An IPO serves several purposes simultaneously. It raises capital for the company. It provides an exit for early investors — venture capitalists who funded the company years ago finally get to convert their ownership stakes into cash. It creates a public currency that companies can use for acquisitions. And it establishes a market price that the company can use to compensate employees with stock-based awards that have real, liquid value.

For retail investors, IPOs represent one of the primary ways that access to new, high-growth companies enters the public market. If a transformative company goes public, anyone with a brokerage account can theoretically own a piece of it. The when and how of that access, however, has changed dramatically — and that is the story worth understanding.

To understand the IPO market today you have to start in 2021, because the scars from that year still shape everything that followed.

2021 was the most extraordinary year for new public listings in modern history. Over 1,000 companies went public in the United States — a number that dwarfed any previous year. Zero-interest-rate policy had flooded markets with liquidity. Retail investors, stuck at home during the pandemic, piled into speculative stocks. The SPAC structure — the Special Purpose Acquisition Company, sometimes called a blank-check company — became the vehicle of choice for hundreds of deals, allowing companies to merge into a public shell and bypass the traditional IPO process. Valuations were astronomical. Investor enthusiasm was essentially unconditional.

The hangover arrived in 2022. The Federal Reserve began raising interest rates aggressively. Growth stocks, which had been priced for perfection in a zero-rate world, repriced violently. Many of the 2020 and 2021 SPAC-era companies saw their share prices fall 70%, 80%, even 90% from their peaks. The IPO market essentially shut down. In 2022 and 2023 combined, U.S. IPO activity was at its lowest sustained level since the 1990s. Companies that had planned to go public quietly shelved those plans and waited.

The SPAC Hangover Explained: SPACs raise a pool of cash through an IPO, then spend up to two years hunting for a private company to merge with. In 2020 and 2021, hundreds of SPACs were raised simultaneously, creating a frenzy of mergers that brought many companies public at valuations that the underlying businesses could never justify. Regulatory scrutiny tightened. Redemption rates soared as investors pulled their cash rather than stay in deals. SPAC sponsors faced enormous losses. By 2022-2023, the structure had lost most of its credibility, and the SEC imposed significantly stricter disclosure requirements on SPAC transactions.

The 2025 recovery was real but uneven. Traditional IPOs raised $33.6 billion in 2025, their strongest year since 2021, according to PwC. Deal count and proceeds grew 27% and 38% respectively compared to 2024. But the year was not without disruption — a market selloff in April following new tariff announcements brought IPO activity to a temporary halt midyear, and a government shutdown later in the year caused additional delays as SEC operations were paused. Many companies that were prepared to list in late 2025 pushed their plans into 2026.

The quality of companies coming public has improved significantly from the 2021 cohort. Average revenue among tech IPOs in 2025 exceeded $800 million, and several debuted at billion-dollar-plus scale. The 2025 vintage of IPOs has returned roughly 30% on average since pricing, a meaningfully better track record than the 2021 vintage. Medline, the medical supply company, was the year's largest IPO, raising $6.26 billion and closing its first trading day up 40% — a strong signal of healthy investor demand when the right company at the right price shows up.

The most notable debut of 2025 — covered in depth in a prior Brezco Analytics issue — was CoreWeave (CRWV), the AI cloud infrastructure company, which raised $1.5 billion in March 2025 and saw its shares climb over 185% from its $40 IPO price by year-end. CoreWeave's debut illustrated both the enormous investor appetite for AI infrastructure plays and the complexity of evaluating pre-profitability companies at scale.

Other major 2025 listings included Klarna, the Swedish buy-now-pay-later fintech founded 20 years ago that finally went public after wild swings in private valuation from $45.6 billion in 2021 down to $6.7 billion in 2022 and back up again. Figma, the design platform, also debuted after its $20 billion Adobe acquisition was blocked by regulators. Chime, the digital bank, completed its long-anticipated listing as well.

The recovery of IPO activity in 2025 is real and encouraging, but it masks a deeper structural shift that has been building for two decades and shows no sign of reversing. Companies are staying private for dramatically longer than at any point in modern market history, and the consequences for retail investors are significant.

In 1980, the median age of a company at IPO was roughly six years. By 2025, that figure had grown to over 11 years for companies valued at $500 million or more — the longest in a decade, according to PitchBook data cited by PwC. Some analyses put the median age even higher for certain cohorts, exceeding 13 years. Klarna, which went public in 2025, was 20 years old at the time of its listing. Nearly half of all U.S. unicorns raised their first institutional round nine or more years ago.

In 1980, the median revenue of a company at IPO was approximately $16 million in inflation-adjusted terms. By 2024, that median had risen to $218 million. Companies are not just waiting longer — they are waiting until they are meaningfully larger, more established, and in many cases already profitable before stepping into public markets.

What This Means for You as a Retail Investor: When companies stay private longer, the most explosive phase of their growth happens before the IPO — behind a velvet rope that most retail investors cannot access. When Google went public in 2004 at a $23 billion valuation, it had been operating for six years. If Google were founded today and followed the current playbook, it might stay private until it was worth $150 billion or more, leaving public investors to participate only after the most dramatic value-creation phase was already complete.

Several forces have converged to make staying private the rational choice for many companies:

The result is a private market of extraordinary scale. The total valuation of mid- and late-stage private companies tracked by Forge Global has grown from $421 billion in 2015 to over $4.1 trillion as of Q3 2025 — now representing nearly 8% of the S&P 500's total market capitalization, up from just 2.2% in 2015. There are over 1,200 unicorns globally, collectively valued at approximately $5.2 trillion. The world's most valuable private companies — OpenAI at $500 billion, SpaceX at roughly $400 billion, Databricks at $87 billion, Stripe at well above $50 billion — would rank among the largest public companies on earth if they chose to list. They have not chosen to.

The good news for investors watching the IPO market is that the pipeline going into 2026 is the most substantial it has been since the pre-2022 era. The disruptions of 2025 — the April tariff selloff, the government shutdown — pushed a meaningful number of IPO-ready companies into a queue that is now building pressure.

PwC's U.S. Capital Markets outlook points to strongest investor interest in AI infrastructure, AI-enabled software, insurance and specialty risk, defense and aerospace, and energy transition infrastructure. Cleary Gottlieb's global IPO review notes that 2025's market dynamics — a backlog of VC and sponsor-backed companies reaching maturity alongside pent-up demand — are expected to carry meaningfully into 2026.

The company that has attracted the most speculation around a potential listing is SpaceX, whose valuation of approximately $400 billion would make it the largest VC-backed IPO in history by a factor of ten. SpaceX has not confirmed any listing plans, and the company has shown no urgency to access public markets. But its shadow looms over the IPO conversation regardless.

Other names that have been discussed for potential public listings include Anthropic, Databricks, Stripe, Chime (which did list in 2025), and a range of defense technology companies benefiting from the surge in government AI and autonomy spending. The defense and AI technology intersection in particular represents a pipeline with strong investor appetite and companies that are generating real revenue — the combination the post-2021 market has demanded.

The 2026 Selectivity Mandate: The market that emerged from the 2022 reset is fundamentally different from 2021. Investors are no longer willing to back pre-revenue companies with speculative valuations and infinite growth stories. The companies that successfully listed in 2025 were overwhelmingly profitable or close to it, with average revenues over $800 million. That bar is expected to remain high in 2026. Companies hoping to list will need demonstrable fundamentals, not just a good narrative.

The SPAC — Special Purpose Acquisition Company — deserves its own brief treatment because its trajectory mirrors the broader IPO market arc so precisely.

In 2021, SPACs raised over $162 billion globally and became the dominant IPO structure. The appeal was real: faster execution, negotiated rather than book-built pricing, and the ability to make forward-looking financial projections that traditional IPO prospectuses prohibited. But the execution was frequently terrible. Many SPAC sponsors rushed deals to beat two-year deadlines, merging with companies at valuations that far exceeded what the businesses were worth. SPAC investors redeemed their shares in droves. Post-merger stock prices collapsed. The SEC tightened rules.

By 2025, something more nuanced had emerged. SPAC issuance more than doubled in 2025 versus 2024, with 122 SPACs raising approximately $22.2 billion, the most since 2021. But the de-SPAC merger rate was much lower — only 38 mergers completed in 2025 — suggesting that sponsors are raising the vehicles but being considerably more selective about which companies they merge with. The structure has moved toward what DFIN describes as a "mature and more sustainable phase," serving as a credible alternative for specific situations rather than a catch-all structure for anything that wanted to go public.

The IPO market is recovering, but it is recovering into a structurally different world than existed before 2022. Companies are larger, older, and more profitable when they list. The number of public companies in the U.S. has fallen from roughly 7,500 in 1997 to under 4,000 today, even as the economy has grown enormously. Innovation is increasingly concentrated in private markets, behind capital structures that most retail investors cannot directly access.

For investors who participate in public markets, what this means practically is that the IPOs reaching the public are the cream of a very mature crop — companies that have already proven themselves in private markets, often for over a decade, before opening their doors. That is a different risk profile than the 2021 era, when speculative pre-revenue companies routinely listed at valuations their businesses could never support.

It is also a reminder that the most exciting growth phase of many of today's most important companies — the AI labs, the defense technology firms, the next generation of fintech — is happening out of sight of most investors. The gap between what is happening in private markets and what public investors can access has never been wider.

2026 should bring a meaningful wave of new listings. Whether those listings represent genuine long-term value or simply the clearance of a backlog that has built during the freeze is the question that will define the year's returns for IPO investors.

^{All sources accessed April 2026. For informational and educational purposes only.}

^{[1] EY. "2025 Global IPO Market Key Highlights and 2026 Outlook." ey.com, December 19, 2025.}

^{[2] PwC. "US Capital Markets 2026 Outlook." pwc.com/us (includes PitchBook data on median IPO age and SPAC statistics).}

^{[3] PwC. "IPO Market Faces Renewed Uncertainty." pwc.com, April 9, 2025.}

^{[4] Cleary Gottlieb. "Global IPO Market Trends: 2025 Review and 2026 Outlook." clearygottlieb.com, January 15, 2026.}

^{[5] Morgan Stanley. "IPO Outlook 2025: Rebound in Activity & Equity Financings." morganstanley.com.}

^{[6] BBAE. "2025 IPO Market Review and 2026 Expectations." bbae.com, December 24, 2025.}

^{[7] Crunchbase. "IPOs Picked Up In 2025 And The Outlook For 2026 Is Even More Optimistic." crunchbase.com, January 21, 2026.}

^{[8] DFIN. "IPO Market Trends & Outlook 2025." dfinsolutions.com, January 2026.}

^{[9] Wellington / Harvard Law School Forum on Corporate Governance. "Venture Capital Outlook for 2026: 5 Key Trends." corpgov.law.harvard.edu, December 23, 2025.}

^{[10] CNBC. "IPO Market: Startups Staying Private Longer with Alternative Capital." cnbc.com, October 7, 2025. (Citing Renaissance Capital and Jay Ritter / University of Florida data.)}

^{[11] Forge Global. "Late-Stage Private Companies: The New Growth Investing." forgeglobal.com, October 13, 2025.}

^{[12] VC Networks. "Why Companies Stay Private Longer (SPL) and What It Means for Family Offices as VC LPs." vcnetworks.gex.vc, June 3, 2025.}

^{[13] Founders Forum Group. "Unicorn Companies 2025: Global List, Stats & Valuation Insights." ff.co, May 2025.}

^{[14] Affinity. "The Unicorn: A Dying Breed or Exit Catalyst in 2025?" affinity.co. (Citing PitchBook unicorn holding period data.)}

^{[15] MNAARA / iCapital. "Unicorns Staying Private Longer: What It Means for Investors." mnaara.com, 2025.}

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