Thu, 22 June 2023
Why Companies Delay IPOs
Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.
Companies stay private much longer than they used to.
Previously companies ran an Initial Public Offering to gain access to the public markets for financing.
Companies delay their IPOs for any of the following reasons:
Avoid the cost of going public which is fairly high given the regulatory requirements.
Maintain a level of privacy over their operations and financials by remaining private.
Continue to operate the business as usual with their own board of directors rather than gaining public scrutiny that comes with a public company.
Avoid the rollercoaster ride of sentiment in the public markets.
The private markets today provide sufficient capital to pre-IPO companies so the need for capital no longer drives companies to go public.
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