Based on recent reports, only 42 venture-backed companies went public in the United States in 2016 – including eight incorporated outside the United States – making it the most challenging year by number of IPOs and by aggregate offering amount raised since the 2009 recessionary period. As reported, the average offering amount per IPO in 2016 was only $77.3 million – the lowest average since 2003.
Venture-backed IPOs in 2017 are on pace to surpass the levels reached in 2016, both in number of IPOs and aggregate offering amount raised. In the first six months of 2017, 31 venture-backed companies have gone public in the United States, including seven incorporated outside the United States. In addition, the Snap IPO in March raised $3.4 billion.
Based on a recent “Venture-Backed IPO Survey” of 34 venture-backed companies that were reviewed:
- All are incorporated in Delaware
- 52.9% listed on the Nasdaq Global Market, 32.4% listed on the Nasdaq Global Select Market, 11.8% on the Nasdaq Capital Market and 2.9% on the New York Stock Exchange
- Average time from incorporation to IPO was just over eight years
- Average time from initial registration statement submission to the SEC to pricing the IPO was nearly 8.5 months
- 30% included a directed share program component in the IPO
- Only seven of the companies completed follow-on offerings in 2016
In addition, companies were also taking advantage of Jobs Act accommodations, in that all submitted a confidential registration statement & almost all provided two years of audited financials.