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Key Takeaways

• Several key factors influenced the IPO market in 2025, including policy-aligned sectors and valuation resets, and these dynamics are expected to remain important throughout 2026.
• Companies in AI, space tech, crypto, fintech, and defense dominated the IPO market last year, reflecting both investor appetite and the priorities of the current administration.
• Several high-profile IPOs coming to market in 2026 could further shape the landscape, and their performance will determine whether the IPO window widens or closes again.

As 2026 progresses, founders, boards, and investors are asking the same question: Will 2025’s IPO momentum continue? There is reason for cautious optimism, but the path forward requires strategic preparation and careful attention to a rapidly evolving market and regulatory landscape.

2025 in Review: A Market Gaining Traction

In 2025, the IPO market gained momentum, with several high-profile IPOs renewing investor confidence. While cautious optimism suggests this will continue throughout 2026, many factors could impact the market. examines what 2025’s momentum means for this year.

The IPO class of late 2025 and early 2026 has been headlined by notable debuts. CoreWeave, the AI cloud infrastructure provider, went public in a highly anticipated offering that tested investor appetite for AI-adjacent infrastructure plays. Klarna, the Swedish fintech giant, completed its long-awaited U.S. listing. StubHub returned to the public markets, and Hinge Health brought the digital therapeutics sector back into the spotlight.

Looking ahead, the pipeline remains robust. Axios recently reported that eight companies plan to raise at least $100 million in U.S. IPOs in a single week, the most activity since 2021. Large AI hyper-scalers and long rumored fintech giants are on the shortlist of potential mega-IPOs for the balance of the year, and their decisions will have outsized influence on the broader market. After-market performance will be key to keeping the window open, as success at the top does not always trickle down to the broader market.

What Drove 2025: Policy Alignment and Valuation Resets

Two structural factors shaped the market’s trajectory last year: policy alignment and valuation resets. According to PitchBook, companies going public last year were concentrated in sectors prioritized by the current administration, including AI, space tech, crypto, fintech, and defense. Excluding healthcare and life sciences, 73.1% of 2025 IPOs occurred in these sectors.

The market also benefited from a valuation reset, with widespread down-round IPOs allowing recalibration from pandemic-era peak pricing to today’s new normal. PitchBook predicts these same factors will continue to influence the IPO market throughout 2026.

The Regulatory Landscape

The legal and regulatory environment has shifted meaningfully over the past 12 months, reshaping how companies approach the public markets.

Deregulation and the Evolving SEC Agenda. The SEC under Chair Paul Atkins has signaled a more permissive approach to capital formation, emphasizing capital access and reducing compliance burdens for emerging growth companies. The SEC has signaled an intent to relax disclosure requirements for smaller reporting companies and EGCs, including potentially streamlining executive compensation and related-party transaction disclosures. These changes would lower the cost of going public and reduce the ongoing compliance burden that has long deterred companies from pursuing an IPO.

The SEC has signaled potential changes in SPAC transactions, like clarifying the treatment of projections in de-SPAC business combinations; and a more accommodating stance on confidential IPO filings.  Congress has passed the Genius Act, providing long-awaited clarity on the regulatory treatment of certain digital assets, opening doors for crypto and fintech companies.  Pending legislation called the Clarity Act would go further, further reducing ambiguity around how crypto assets are regulated and which authorities oversee them. 

Capital Markets Architecture.The NYSE and Nasdaq have refined their direct listing frameworks, and more companies are considering hybrid structures that combine elements of traditional IPOs, direct listings, and private placements. For companies with strong brand recognition and existing investor bases, these alternatives can offer meaningful cost savings and greater pricing transparency. The SEC’s 2025 amendments to Regulation A+ have also raised the annual offering cap, making this pathway potentially more viable for mid-sized companies.

A Reform Agenda: Rebalancing Public and Private Markets

While these developments are encouraging, they do not go far enough. The fundamental imbalance in capital markets (where it is too expensive to be public and too easy to stay private) remains unaddressed. The current system starves retail investors of opportunities while concentrating wealth in the hands of institutional players. Structural reforms are needed to rebalance incentives between public and private markets.

First Priority: Increase Transparency in Private Markets. The 500-stockholder threshold should be reinstated. The JOBS Act created a world where companies can raise billions from pension funds while avoiding public disclosure obligations by raising the threshold from 500 to 2,000 stockholders. Additionally, any company raising $1 billion or more in private capital should be required to publish audited financial statements and register with the SEC.

Second Priority: Reduce the Cost of Being Public. A move to semiannual reporting, the standard in most developed markets, would reduce compliance burdens while still providing timely information. Non-material disclosure mandates should be scaled back to refocus on material financial and operational information. Securities litigation reform is also needed to curb abusive strike suits and allow companies to require derivative lawsuits to be brought in Delaware.

Third Priority: Restore Market Infrastructure. The Global Research Settlement restrictions have handcuffed investment banks from publishing meaningful research on emerging companies for over twenty years, harming smaller issuers who lack analyst coverage. Additionally, making it easier for brokers to charge reasonable commissions in exchange for value-added services would improve research and advisory services for retail investors.

Fourth Priority: Improve After-Market Quality. The standard 180-day lockup period is too short and often leads to a cliff effect that distorts after-market trading. Moving toward one-year lockups would align insider incentives with long-term performance.

The Current Reality: An Open but Narrow Window

Companies considering an IPO today must navigate the market as it exists. While 2025 brought improved liquidity conditions, the number of companies that went public (48) was consistent with other post-pandemic years, with only 17 unicorns. This points to highly concentrated exit value that does not amount to a full recovery. PitchBook predicts that without a broader slate of large IPOs, the venture market will feel pressure. The greatest challenge this year is widening the IPO window to generate a durable, market-wide recovery of liquidity.

Practical Guidance for Companies Considering an Exit

Several observations apply for founders and boards considering their options in 2026:

IPO readiness is a process, not an event. Companies best positioned to take advantage of an open window are those that have invested in governance, financial controls, and public-company infrastructure well in advance. Waiting until the market opens to start preparing means being already behind.

Diversify exit options. While the IPO market is improving, M&A remains a viable and often attractive path to liquidity. Strategic acquirers are active, and the regulatory environment for deal-making has become somewhat more predictable. Running a dual track process when possible, maximizes optionality and negotiating leverage.

Understand the regulatory landscape. The deregulatory trend is real, but it is not a green light to cut corners. Companies that go public with weak disclosure practices or governance gaps will face scrutiny. Taking advantage of streamlined requirements while building a culture of transparency and accountability remains the best approach.

Watch after-market performance closely. The success of the 2026 IPO class will depend not just on pricing, but on performance in the weeks and months after debut. Sustained after-market performance will build confidence and widen the window; early stumbles could close it again.

Conclusion

The 2026 IPO market is cautiously reopening but remains far from fully normalized. Policy-aligned sectors and recalibrated valuations have helped restore investor confidence, yet IPO activity remains concentrated among a narrow group of high-performing companies. In the near term, the performance of the 2026 IPO class will determine whether the window widens or closes.

Over the longer term, structural reforms are needed: increasing transparency obligations for mega-scale private companies, reducing compliance burdens for public companies, restoring research and brokerage infrastructure, and extending lockups to align insider incentives with long-term performance. The current regulatory environment may finally provide an opening for meaningful reform.

Louis Lehot is a partner at ��������; Lardner LLP, where he advises public and private companies on capital markets transactions, M&A, and corporate governance.