The IPO Comeback Has A Catch
The public markets are open again — but only for companies that were never really struggling to get in.
Written by OutOfToken AI
June 6, 2026 · 4 min read · Synthesized from reporting by Crunchbase News · How this works
Every year for the past half-decade, the same forecast circulates: the IPO window is finally open. Instacart listed. Klaviyo priced. Birkenstock debuted on the NYSE. The headlines arrive like clockwork, and the narrative machine spins back to life. But beneath the celebration lies a structural problem that no bull market has fixed: the bar for going public has risen so dramatically over the past three decades that most private companies — and the investors who backed them — are effectively locked out of the exit they were promised.
A Market Reshaped by Scale
The mechanics of the modern IPO have quietly priced out the middle of the market. Median IPO size has grown substantially over the past decade, driven by a confluence of regulatory complexity, institutional investor expectations, and the sheer cost of maintaining a public company — Sarbanes-Oxley compliance, quarterly reporting infrastructure, investor relations overhead. What was once a viable path for a $200 million revenue business is now largely the exclusive province of companies approaching or exceeding unicorn valuations. SpaceX, OpenAI, and Anthropic generate breathless speculation about their eventual listings, but those are trillion-dollar narratives. They are not a policy solution for the thousands of well-built, moderately scaled companies sitting in venture portfolios with no clear path forward.
The Frozen Middle
Shawn Bercuson, founder of Earlyasset, frames this as a liquidity crisis hiding in plain sight. The companies most affected are not failures — they are mid-sized private firms generating real revenue, employing real workforces, and sitting on cap tables populated by early employees and seed-stage investors who have waited years for a return. For them, the IPO market's supposed comeback is largely theatrical. The large-cap listings generate market confidence and CNBC segments, but they do not unblock the exit valve for the broader ecosystem. The result is a growing population of stranded stakeholders: angel investors locked into positions from 2016, employees holding options that vest but cannot be meaningfully exercised, and founders unable to provide liquidity without a buyer willing to pay at the last marked valuation.
""The IPO window being 'open' for SpaceX and OpenAI is like saying the housing market is healthy because penthouses are selling. It tells you nothing about where most people live.""
The Secondary Market Fills the Gap — Imperfectly
The logical response has been the maturation of private secondary markets, where shares in pre-IPO companies change hands between accredited investors and institutional buyers. Platforms and brokers facilitating these transactions have grown considerably, and tender offers have become a more common mechanism for providing partial liquidity to employees and early backers. But the secondary market, as it currently exists, is fragmented, opaque, and deeply illiquid compared to public equity. Pricing discovery is unreliable. Transaction costs are high. Regulatory frameworks governing who can participate remain restrictive. Bercuson's argument — that the sustained closure of the IPO valve for mid-market companies has created both the demand and the obligation to build a more sophisticated, accessible private secondary infrastructure — carries real weight. The pressure is not going away. With the median time from founding to IPO now stretching past a decade for venture-backed companies, the volume of locked-up capital is compounding year over year.
The IPO market's revival, real as it is at the top end, is unlikely to solve the structural liquidity deficit building across the private ecosystem. If regulators, exchanges, and market builders fail to construct durable secondary pathways — ones with genuine price transparency, broader participation rules, and lower friction — then the celebrated comeback will remain what it currently is: a story about giants, written by giants, for an audience that mostly isn't one. The startups waiting for their moment may find that the window was never really opened for them at all.
Editorial Note
The claim that IPO thresholds have risen is supported by empirical data—the median IPO size has increased significantly over the past decade, and regulatory/market conditions have made smaller public offerings less economically viable. Crunchbase News is a reputable tech publication owned by Crunchbase, known for reliable reporting. However, the article presents a guest opinion, so while the underlying trend is factual, the policy recommendations reflect the author's perspective rather than consensus.
Claim Tracker
AI-assessed
US median IPO size has increased from ~$100M in 2010s to $150M+ in recent years; trend is directionally accurate
SOX compliance costs estimated at $1M-4M+ annually; well-documented burden on public companies
Claim lacks specific data; relies on assertion rather than quantitative support of what percentage of companies 'locked out'
Overstated; companies with $200M+ revenue still IPO regularly, though smaller offerings are less common and face higher relative costs
Average IPO size and minimum valuation expectations have increased measurably since 1990s
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