Jennifer Rudden
Research expert covering finance, real estate and insurance
Get in touch with us nowNumber of IPOs in the U.S. 1999-2020
2020 was quite a year for IPOs, which was largely influenced by the significant rise in the number of special purpose acquisition companies (SPACs) who went public. In 2020, there were 407 initial public offerings (IPOs) in the United States. This was more than twice as many as in the previous year.
What does it mean to go public?
The management of a private company has a lot of control over its operation but raising funds from investors is more difficult. To access funds from regular investors, that is the general public, firms go public by offering stock shares at a certain price. As a result, these firms often have more capital to work with. An IPO can, and often does, raise billions of dollars for a firm. However, publicly traded companies also face increased regulation and disclosure requirements.
Staying private
Some firms delay going public for a longer time, in spite of their increasing value. If their valuation goes above one billion U.S. dollars, these firms are called unicorns and the highest valued unicorns are mostly based in the U.S. and China. Some firms, such as SpaceX, are still heavily investing in research and development projects, which shareholders often dislike due to low short-run dividends. At the moment, most unicorns are found in the technology sector, which is also the leading sector for IPOs in the United States. This indicates that investors consider this to be the industry most likely to see growth, and thus most worth investing in when companies go public.
What does it mean to go public?
The management of a private company has a lot of control over its operation but raising funds from investors is more difficult. To access funds from regular investors, that is the general public, firms go public by offering stock shares at a certain price. As a result, these firms often have more capital to work with. An IPO can, and often does, raise billions of dollars for a firm. However, publicly traded companies also face increased regulation and disclosure requirements.
Staying private
Some firms delay going public for a longer time, in spite of their increasing value. If their valuation goes above one billion U.S. dollars, these firms are called unicorns and the highest valued unicorns are mostly based in the U.S. and China. Some firms, such as SpaceX, are still heavily investing in research and development projects, which shareholders often dislike due to low short-run dividends. At the moment, most unicorns are found in the technology sector, which is also the leading sector for IPOs in the United States. This indicates that investors consider this to be the industry most likely to see growth, and thus most worth investing in when companies go public.
