| Going public certainly isn’t for every company, as it comes with stringent disclosure requirements and quick reporting periods. Nevertheless, it’s a prime goal for many companies, not least because early investors often want an avenue to cash out their shares. Lately though, fewer and fewer businesses have been willing to venture into the tumultuous waters that public ownership can bring, and it’s largely because the seas of the stock market have been choppy as ever these last few months. Historically speaking After the late 90s IPO surge, things cooled off significantly throughout the first two decades of the century. A typical year in this time frame saw anywhere from 100 to 300 companies go public—a seemingly reasonable number of newcomers in the public markets per year. Well, that was up until 2020 when we saw the most public offerings since 1999—431 to be exact. But that’s nothing compared to the nearly 1,000 companies that went public in 2021, a historic amount. And of those companies that went public in 2021, a whopping 63% of them did so via a SPAC, a figure we hadn’t even come close to up until 2020. Nowadays though We might’ve just flown too close to the sun these last couple of years because this year has been extremely dry in comparison. Thus far in 2022, only 64 companies have gone public, with 83% of them via SPAC acquisitions, an extremely high benchmark for the alternative IPO option. The proof is in the funds raised, too. Just $65 billion have been raised via IPO globally this year, a stark discrepancy from the $219 billion seen throughout the first few months of 2021, and an almost 75% drop. 
The factors that affect us too This might all be seemingly irrelevant news considering most of us aren’t on the verge of taking a business to the public marketplace, but the reasons behind this slump impact us all as investors. - Broad market conditions have been extremely iffy in Q1 of ‘22 with volatility being the norm. And global macroeconomic affairs don’t make things any easier, with things like historic inflation and geopolitical conflict coming together to create an economic Cat 5 hurricane of uncertainty.
- It’s not just companies vying to go public who are suffering as institutional players go risk-off, but regular investors like us and anyone who attempts to invest in the market, actively or not.
- And with every action there is a reaction, though. In these times of “stagflation,” where strong job growth holds hands with inflation and recession fears, it is fair to assume that the IPO market will snap back. That’s because the line of companies ripe for an IPO is growing ever longer in anticipation of healthier market conditions.
Perhaps the biggest takeaway for most of us will simply be a test of emotional intelligence and finding out truly how grounded we’re able to be until the market does flip. While it’s a great time to reassess your strategy if you’re invested in growth stocks and have a short-term horizon, it can also be smart to double down on patience if you are playing the long game. | 
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