Reviving the U.S. IPO Market -

A recent study based on work undertaken by the University of Florida found that the median age of companies going public in the United States in 1999 was 5 years. Between 20042016, the median age grew to 10 years. Six companies between 2004 and 2015 reached valuations upwards of $10 billion before going public in the United States. Capital invested in private tech companies grew from $11b billion in 2005 to $75 billion in 2015 and almost tripled from 2013 to 2015. The market is “losing” IPO candidates as promising companies choose to stay private longer or pursue M&A exits.

On May 10, 2017, the Securities and Exchange Commission (“SEC”)’s Division of Economic and Risk Analysis and New York University’s Stern School of Business held a dialogue aimed at assessing the economic factors causing the recent downturn in initial public offerings (“IPOs”) in the U.S. market. Former Acting Chair and current SEC Commissioner Michael Piwowar began the dialogue, reiterating the importance of making public capital markets available to businesses. Commissioner Piwowar emphasized that a robust IPO market fosters innovation, creates jobs and provides opportunities for investors to increase wealth and mitigate risk.