The fading allure of the IPO

The contrast between the current climate and the 2021 boom is sharp. That year, the Nasdaq welcomed 743 IPOs, while the New York Stock Exchange added over $1 trillion in market capitalization. Companies like Coinbase, Roblox, and Rivian led a wave that saw nearly $500 billion raised. Today, however, the pipeline has slowed to a trickle. Even when companies do test the waters, the results are often tepid; recent listings for Jersey Mike’s and Reformation saw shares trade flat or decline on their debut.

Mike Dinsdale, CEO of Powerlaw, attributes this retreat to a structural change in how businesses manage capital. With the number of public companies in the U.S. having halved from roughly 8,000 to under 4,000 over the last three decades, the urgency to go public has evaporated. Private markets, bolstered by megafunds and an influx of family office wealth from the ultra-wealthy, now provide sufficient liquidity without the burden of public transparency or the scrutiny of quarterly reporting. For modern founders, the public market is no longer the inevitable destination it once was.