The IPO Vanishing

A major reason is the growth of private equity capable of delivering very large investments equivalent to that of an IPO. This has pushed many public listings back a stage, meaning companies arriving on stock markets are bigger, more established and less volatile than 20 years ago.

Business owners can raise capital efficiently and retain more control of strategic direction than they would listing on a stock market, says Tim Mills, investment director at the Angel CoFund. It means they can hit long-term targets before going public. “IPOs are expensive, time consuming and public disclosure can make building a business more challenging. Public markets can be a lot less orderly than private ones if a stock is widely held. Complex or evolving business strategies can be very difficult to explain to large groups of investors, making them hard to execute without the inevitable impact on pricing and business perception.”

See the full article on P26 of the BVCA journal here