IPOs Rising: What SEC Data Says About Small and Pre-Public Companies

By Liz Dunshee

The SEC’s Office of the Advocate for Small Business Capital Formation (OASB) recently published a data-packed report that spotlights the ways smaller companies are getting capital as they grow from startups to public companies and beyond. The report gives various snapshots from October 2024 through September 2025 and corresponding calendar-year periods. Below are some insights that matter for companies preparing to go public or scaling as new issuers.

Why companies still choose to go public: Liquidity, growth and credibility

IPO volume and proceeds are trending up from historical lows. SEC Chair Paul Atkins is looking to energize the public markets by simplifying disclosure requirements, depoliticizing the shareholder process and mitigating litigation risks. Additionally, IPOs are still compelling for a simple reason: going public unlocks a larger investor pool to fund research and development, capital expenditures and debt service, as well as credibility that private markets can’t always match. Four years after an IPO, companies typically show meaningfully stronger financial profiles than their private-company peers:

• Capital expenditures +40%
• Total assets +50%
• Bank debt +40%
• Credit spreads nearly 25% lower

Of course, lower capital costs and broader investor access aren’t the only motivator. Companies also continue to recognize that an IPO unlocks liquidity for employees and earlier-stage investors. Unlike M&A-driven liquidity, an IPO allows these loyalists to keep some skin in the game – so they still get to share in the company’s long-term company growth.

Who’s going public? Hot sectors and pipeline trends

Excluding SPACs, the top IPO industries are technology, healthcare, manufacturing, real estate, and banking/financial services. VC-backed companies continue to anchor the pipeline, accounting for 51% of IPOs and 66% of technology IPOs since 2000. Founder-led IPOs are more common in high-growth sectors like services, software and life sciences (see Cooley’s Post-IPO Governance Trends Report for more on this).

Small public companies: Actively funding growth, but lacking coverage

The number of public companies has decreased compared to prior decades, but public companies have increased in size. According to the report, that’s due to a combination of factors – including public company mergers, small company delistings and fewer IPOs.

Life as a public company looks different for smaller companies as compared to their larger counterparts. For example, smaller companies are less likely to be exchange-listed – 68% of smaller companies versus 98% of larger companies – and their compliance costs are proportionately higher.  

Smaller companies also face visibility issues. In some ways, it can be nice to fly under the radar. The downside is that companies in the Russell Microcap Index average three analysts, and 17% have no coverage at all. That can make it challenging to attract institutional demand and stay liquid. Companies that tighten their investor-relations narrative and strategically plan follow-ons to give investors a compelling growth opportunity are best-positioned to overcome this hurdle.  

Smaller companies are actively raising capital – 21% of small public companies conducted a registered equity offering in the 12 months ending June 30, 2025, which worked out to be 50% of all registered equity offerings that occurred during that period. In the first half of 2025, these offerings averaged $21 million in proceeds.

Later-stage private companies: Bigger rounds, older companies

Another trend discussed in the report that we’ve seen in real time, especially in the tech industry, is the continued shift toward bigger, later-stage rounds as companies look for larger amounts of capital to fund operations at scale and prepare for public markets. The report also paints a picture of “haves” and “have nots.” Here are a few venture capital stats:

• VCs tend to invest in high-growth companies, typically with a 10-year lifecycle baseline.
• VC investments have been shifting from earlier stages (Series A and B) to later-stage companies (Series C and later).
• Most VCs contact their portfolio companies at least once a week, and VCs have been making more reinvestments into existing portfolio companies than new investments.
• Overall deal volume decreased, but value increased and has become more concentrated.
  • In the first half of 2025, 40% of all VC dollars went to 10 companies, and the share of deals below $5 million fell to a decade low of 49%.
  • Median deal size was $100 million for Series D, $61 million for Series C, $30 million for Series B, and $14 million for Series A.
• Down rounds reached record levels. Factors include overpricing in a previous environment, operational challenge, strategic pivots and changes in market risk tolerance.
• The median age of a company raising Series D+ was 9.7 years, and the number of companies remaining private eight+ years after receiving their first VC round has quadrupled compared to a decade ago.
• For VCs, acquisitions have been the dominant exit route – but IPOs are reemerging as an option.
  • In VC-backed IPOs, the percentage of shares sold by selling shareholders has almost doubled compared to historical levels, to 14%.
  • The private secondary market has also gained traction as an exit path.

Ahead of these VC rounds, companies are also taking longer to get from the seed stage to Series A – about 2.1 years – and engaging in broader investor outreach to get the funding they need. In light of these trends, later-stage companies that are considering an IPO should think ahead about cap table conversions, investor dynamics, related-party transactions, and clean documentation of share issuances and investor rights. Nobody wants last-minute surprises, which can jeopardize IPO timing and success. An experienced deal team can help navigate these complexities and assist with cleanup if needed.

Action items to meet the moment

The OASB report gives a picture of how capital sources shift as companies grow and mature, and surfaces sector-specific trends that we see play out with our clients. For example, tech companies tend to stay private longer. They enter the public market with business momentum and complex cap tables. Meanwhile, we see life sciences companies going public earlier and conducting more follow-ons to fund R&D and commercialization. Here are a few things companies can do to keep momentum in today’s environment:

• Pre-IPO: Map your cap table and financing history – and stay disciplined in documenting share issuances and key agreements.
• During the IPO: Design an investor relations strategy for thin coverage.
• Post-IPO: Continue to plan a capital-raising runway in advance of windows and needs – think about milestones, at-the-market capacity, registration statement eligibility, lockups and registration rights, etc.

Visit Cooley’s IPO GO platform for resources to prepare for going public and navigating being a newly public company, including our article on “25 Considerations in Preparing for an IPO” and our interactive Form S-1.