Five years after the IPO boom of 2021, the landscape of public markets has shifted dramatically. Companies are staying private for longer. The reasons are clear. According to recent data, the Nasdaq welcomed 743 initial public offerings that year. The New York Stock Exchange added over $1 trillion in market capitalization. The 2021 IPO class was notable for its diversity. Names like Coinbase, Roblox, Rivian, and Warby Parker made waves. Morningstar reports that these companies collectively raised nearly $500 billion. That is more than double the amount from 2020. But today, the market looks very different. While SpaceX's blockbuster IPO stood out in recent years, the broader trend is a dramatic decline in public offerings. Consumer firms like Jersey Mike's and Reformation made their public debuts in 2026. But with lukewarm results — Reformation barely moved in value. Jersey Mike's also had a weak performance.
Mike Dinsdale, CEO of Powerlaw — a publicly listed fund that invests in private companies — points to a growing trend. Companies are rethinking their approach to liquidity and capital. Today, there are under 4,000 public companies in the U.S. This is a sharp decline from the nearly 8,000 that existed 30 years ago. Dinsdale attributes this shift to a combination of factors. Better access to capital in the private sector is one. The advantages of avoiding public scrutiny are another. When a company goes public, it must provide regular, detailed financial disclosures. It is subject to intense pressure from investors and analysts. For many, the benefits of staying private — such as higher valuations and more control — outweigh the allure of public market liquidity.
Private capital fuels growth
One of the key drivers of this trend is the rise of secondary markets. Investors can trade shares in private companies there. Sunaina Sinha Haldea, the global head of Private Capital Advisory at Raymond James, explains. These markets have become a critical tool. Private companies can raise capital without the need for an IPO. Companies are no longer forced to follow a traditional path to public markets. That is simply because of the need for liquidity. Instead, they can turn to private investors. These investors are willing to purchase large stakes in later-stage private companies. This helps them raise cash without the visibility and pressure that accompany public trading.
The growth of secondary markets is part of a larger trend in private capital. Over the past five years, family offices and private investment vehicles have become a powerful force in the market. This has created demand for investments in private companies. This has been especially important in the consumer sector. Major brands like Publix, Sephora, and Chick-fil-A remain private. As Dinsdale noted, “The reason for that, I think, is access to capital, and then the idea that staying private and not having any transparency into what's happening, and then higher valuations on the public side.” This trend, he says, has been unfolding for decades. The recent surge in private capital has only accelerated it.
Venture capital has also played a major role in shaping this new landscape. Jason Yeh, co-founder of Patron, a venture capital firm specializing in consumer companies, highlighted how the volatility in public markets is making it less attractive for private companies to go public. Public consumer and retail stocks have struggled to deliver consistent returns, making the risks of an IPO seem even greater. With these options, companies can delay an IPO indefinitely while still attracting the funding they need to grow.
IPOs remain an option, but with caution
Despite the cooling of the IPO market, going public is still a viable and sometimes necessary strategy. SpaceX's recent public offering, for instance, demonstrated the massive financial potential of an IPO. Yeh sees the appeal of going public for companies with strong cash flow and scalable models. He also believes the timing of an IPO matters, with macroeconomic conditions playing a crucial role. “Hopefully, the overall macroeconomic conditions are better when that happens, versus doing it into a weaker market.”
Yet, the challenges of public markets remain a deterrent for many. Quarterly earnings reports, regulatory scrutiny, and investor expectations can weigh heavily on a company’s operations. Dinsdale, who has experience in leadership roles at companies like DoorDash and DocuSign, explained that many founders are reluctant to face these challenges. For many, the tradeoff between growth and control simply isn’t worth the risk.
Looking ahead, some experts believe the next wave of IPO activity is just around the corner. Yeh anticipates that companies that could have gone public in the past few years will likely do so in the next 12 to 18 months, especially as macroeconomic conditions improve. However, for now, the private route remains the path of choice for most. As the market continues to evolve, the balance between the allure of public markets and the advantages of private capital will shape the next chapter of this ongoing shift.