What Changed?
The contradiction is hard to ignore: U.S. equity indices sit near record highs, yet the primary market that usually thrives in buoyant conditions remains unusually quiet. Despite strong risk assets, IPO activity hasn’t meaningfully rebounded from its 2022–2023 slump. Bankers expected a more robust pipeline by late 2024, but many companies continue to delay listings, opting to raise private capital or extend existing funding rather than test public markets.
What’s new is how persistent this drought has become. Even as volatility declines and credit spreads narrow, the IPO window isn’t fully reopening — a sign that deeper structural hesitations are at play. Companies that would traditionally use rising equity valuations as a springboard are watching from the sidelines, revealing a disconnect between market performance and true risk appetite.
Every week Elon Musk is sending about 60 more satellites into orbit. Tech legend Jeff Brown believes he’s building what will be the world’s first global communications carrier.
He predicts this will be Elon’s next trillion-dollar business.
And when it goes public, you could cash out with the biggest payout of your life.
The Numbers
U.S. IPO proceeds year-to-date remain roughly 40–50% below the 10-year average, according to S&P Global
Average first-day price performance is positive but concentrated in a handful of profitable, brand-recognizable firms
Venture-backed IPOs are still running at less than half of pre-pandemic norms
The median time companies stay private has stretched to more than 12 years
Equity market volatility (VIX) sits near multi-year lows, removing the usual macro excuse for muted issuance
Why It Matters
A weak IPO pipeline in a strong market tells us that investors are selective and still demand clear profitability before absorbing new equity risk. Growth-stage companies — once willing to list early and scale publicly — are instead choosing extended private rounds, often at lower valuations. That keeps public market opportunity sets narrow and concentrates flows into established large caps.
For the broader market, fewer IPOs mean fewer avenues for capital formation and less sector-refreshing innovation. When only mature or highly profitable firms can list, equity indices become more dominated by incumbents, reinforcing today’s concentration dynamic.
For investors, a slow IPO market has portfolio consequences. It limits access to emerging growth stories and keeps performance tethered to mega-cap leadership rather than a broader earnings cycle. It also signals that, beneath the surface, risk appetite is more cautious than headline index levels suggest — a cue to watch how sentiment shifts as rates stabilize and liquidity conditions evolve.
Takeaway
A disappearing IPO market in the middle of a strong equity backdrop is a quiet warning: confidence looks high on the surface, but the willingness to underwrite new risk is still restrained. That gap between performance and appetite is one of the most important signals for 2025.
— Lauren Brown
Editor, American Ledger