Can America’s IPO Engine Restart?
The stock market may be booming, but the allure of going public has dimmed. A growing number of high-growth companies are choosing to remain private, contributing to a dramatic fall in U.S. listings — down from 8,090 in 1996 to a little over 4,000 today.
Why the IPO Pipeline Is Shrinking
Several structural and market forces have combined to shrink the IPO pipeline, making private growth more appealing than going public:
Abundant private capital lets companies raise billions without going public.
Regulatory burdens make IPOs costly, complex, and legally risky.
M&A offers faster liquidity and easier exits than public listings.
Looser private market rules encourage firms to stay private longer.
Market volatility makes IPO timing unpredictable and risky.
Short-term investor pressure discourages long-term strategy.
Founder control and flexibility are easier to maintain when companies are private.
Public scrutiny, numerous law suits and ESG demands make private life more attractive.
While tech culture and market dynamics play a role, meaningful recovery in the IPO market ultimately depends on policy reforms that align incentives and ease structural burdens.
Paul Atkins’s Mission: “Make IPOs Great Again”
Paul Atkins, the Trump-appointed chairman of the Securities and Exchange Commission (SEC), said Friday that he believes heavy regulation is to blame for the IPO drought. His plan: cut red tape, streamline disclosures, and make public markets more appealing.
His key proposals include:
Simplify reporting: End quarterly filings to reduce burdens, though critics warn this could weaken transparency.
Limit shareholder proposals: Restrict ESG-related resolutions from proxy ballots.
Curb lawsuits: Allow mandatory arbitration for investors, shifting disputes out of court and sparking concern over reduced shareholder rights.
Japan’s IPO market has thrived in recent years, driven in part by a streamlined registration reporting processes that allows companies to move from filing to listing in a fraction of the time required in the U.S., making public markets a more efficient and attractive path to growth.
Deregulating Private Markets Too
Atkins is also pushing to open private investments — like private equity — to retirement accounts. Critics say this makes staying private even more attractive, worsening the decline in public listings.
Democratic Commissioner Caroline Crenshaw disagrees with Atkins’s approach, arguing that stronger guardrails on large private firms — such as mandatory audits and disclosures — would push more companies to go public while protecting investors.
M&A: The Quiet Culprit
Another major factor is tech M&A. Dartmouth researchers found that buyouts, both public and private, account for much of the listings decline. Startups often find being acquired faster and less risky than going public.
To compete, Professor Alexander Platt of the University of Kansas suggests speeding up the SEC’s registration process — making IPOs as quick and efficient as acquisitions. Others call for stronger antitrust enforcement to reduce the dominance of “winner-take-all” corporate giants.
What’s Next?
Atkins’s agenda faced early hurdles, including a government shutdown, but the SEC has since rolled out flexible new filing options. Last week Navan was the first to use them, raising about $500 million in one of the year’s biggest tech IPOs. Meanwhile, OpenAI is reportedly preparing a potential $1 trillion listing — a move that could redefine investor expectations and underscore AI’s growing dominance in the global economy. So far, 180 U.S. companies have gone public this year, up from 150 last year. Atkins hopes reforms can eventually restore IPO levels to their 1990s heyday.
Can Tech Balance Long-Term Vision with the Short-Term Demands of Public Markets?
While control, disclosure burdens, and abundant private capital all matter, the deeper cultural fault line lies in tech’s resistance to short-term pressure versus its commitment to long-term vision. Public markets demand quarterly results — a rhythm often at odds with the multi-year innovation cycles that drive breakthrough technology companies.
Strong M&A activity and a vibrant IPO market serve as twin engines of innovation, providing liquidity, capital, and strategic momentum for the technology sector. Robust exits reward early investors and founders, recycle capital into new ventures, and enable companies to scale ambitious ideas into global platforms. Together, mergers, acquisitions, and public offerings sustain the multi-year innovation cycles that produce transformative technologies and keep the U.S. at the forefront of global competitiveness.
Conclusion: Reigniting America’s Public Market Engine
If the United States wants to remain the world’s innovation powerhouse, it must find a way to restart the IPO engine. That means modernizing SEC processes, balancing investor protection with efficiency, and ensuring public markets once again serve as a catalyst—not a constraint—for growth. A vibrant IPO market fuels the innovation loop, recycles capital into the next generation of startups, and strengthens the country’s economic resilience. Restoring that pathway isn’t just about financial reform; it’s about reaffirming America’s commitment to open, dynamic, and forward-looking capitalism.