Markets are once again showing renewed vigor for public offerings. After several years of volatility and diminished activity, initial public offerings have staged a notable comeback in 2025. IPO activity rose most visibly in the U.S., where equity issuance has surged more than 80 percent year-over-year to US$26.3 billion—the strongest first-half showing since 2021.1
These developments have opened doors for private company founders and executive to consider an IPO’s advantages for capital access, market visibility, and long-term growth opportunities. But deciding whether to pursue a listing is not a decision made overnight. It requires careful assessment of whether public ownership aligns with enterprise strategy, capital needs, and leadership objectives.
Why companies consider going public
An IPO’s most common rationale is straightforward: access to capital. Its proceeds can accelerate growth, strengthen balance sheets, or provide partial liquidity, even exits, for founders and early investors. Public equity markets also offer another unique advantage. Once listed, companies can return for follow-on offerings much faster and more efficiently than what private channels typically can provide.
Public equity can also serve as an acquisition currency. Using liquid, publicly traded stock as consideration in mergers and acquisitions can be decisive when competing against privately held peers. That same liquidity extends to compensation. Equity-based incentives tied to a listed share price help align employees with a company’s growth while offering them tangible value through options or stock grants.
Finally, an IPO can boost a company’s industry reputation significantly. A listing conveys permanence and transparency that private status often cannot. Customers, suppliers, and strategic partners tend to view publicly traded companies as long-term market participants capable of weathering cycles and delivering on commitments.
Hidden considerations
The appeal of public markets should be weighed against obligations that can alter how a company operates. Chief among them is transparency. Public companies must disclose financial performance every quarter, subject themselves to analyst scrutiny, and make decisions under the spotlight of audited financial disclosures. For management, this can redirect significant amounts of time toward earnings preparation, investor calls, and conferences.
Governance demands also grow dramatically post-IPO. Boards are typically expanded to include independent directors, committees must be formalized, and internal controls have to be strengthened. For some founders, this transition can feel like a loss of autonomy, as decision-making becomes subject to broader oversight.
One major gating factor in the IPO process is preparing audited financials. Companies with public debt may already have systems and controls in place, but others must invest heavily in finance teams and compliance to withstand a rigorous SEC review. This step is usually the biggest source of delay in a company going public.
Disclosure creates further considerations. A listing requires sharing business models, margins, and forward-looking guidance, which may provide competitors with valuable insights into previously private company that they never had before.
Notably, selling shares to the public inevitably dilutes ownership, which means founders must share both their economic interests with other investors and, over time, potential control of the company. Five years after Apple’s IPO, Steve Jobs was forced by his board to resign from the company he founded just nine years before. And business history is replete with stories of hostile takeovers by corporate raiders.
When staying private makes sense
Remaining private can be a deliberate long-term strategy supported by abundant private capital. In fact, the number of U.S. public companies has fallen from about 8,000 in 1996 to roughly 4,000 today, while over 11,500 companies are now controlled by private equity, venture, and private‑credit investors.2 Private markets enable many businesses to finance expansion, pursue acquisitions, and reward shareholders without entering the public domain.
With confidentiality preserved, leadership of private companies can focus on long-term value creation without quarterly scrutiny, and private structures permit higher leverage levels than the public markets would typically tolerate. Nevertheless, private markets rarely match public equity's liquidity, visibility, or employee-incentive advantages. Therefore, the choice to remain private should be based on alignment between ownership goals and the company's growth trajectory.
What makes a strong IPO candidate
The qualities that define a successful IPO candidate are consistent across industries. Foremost is a credible growth profile—revenue expansion that is both meaningful and sustainable. In addition, markets reward differentiation: companies that provide a clear competitive edge, whether through technology, market position, or customer model, tend to command stronger valuations.
Leadership quality also matters. Public investors seek management teams with proven track records of navigating cycles and executing strategy. Balance sheet strength is equally important. Companies carrying excessive leverage may struggle under the scrutiny of public markets, where investors demand resilience across varied business conditions and inevitable cycles.
Profitability is nuanced. Absolute earnings are not always required, but a defined and believable path toward profitability has become critical. During the exuberant period of 2020–2021, many issuers advanced to market with little regard for near-term earnings. In today’s environment, fundamentals have reasserted themselves. Healthy balance sheets, disciplined governance, and transparent growth strategies are the markers of an attractive IPO candidate.
It is also true that some industries can sustain higher leverage in private markets than would be acceptable publicly. For these firms, remaining private longer can offer a period of flexibility before embracing the discipline required of a listed company.
Knowing if an IPO is right for you
The public markets have reopened as a viable option for mid-market companies. After years of less activity, conditions now favor a wider range of issuers, supported by investor appetite for differentiated growth stories and disciplined balance sheets. Yet the decision to list is not one to be made quickly. It requires careful assessment of whether the benefits—capital access, acquisition currency, employee incentives, and market visibility—outweigh the obligations of disclosure, governance, and potential dilution.
For some firms, remaining private will continue to offer the optimal balance of flexibility and confidentiality. For others, the current environment represents a timely opportunity to establish permanence and scale through the public markets. In either case, the decision should reflect long-term objectives, not short-term trends. The most successful transitions are those led with consistency and conviction—qualities that reassure boards, analysts, and investors alike that the strategy that created today’s success can also sustain tomorrow’s growth.
Next steps: If you’re weighing the decision to take your company public versus staying private and need help assessing your risks and benefits, contact Brad Limpert or your TD Bank Relationship Manager to set up a confidential, no-obligation evaluation of your options with a capital markets expert.
1U.S. IPOs rebound in Q2 2025 amid mixed global activity. S&P Global Market Intelligence. July 24, 2025.
2 Andy Serwer. Private Markets Are Crowding Out Public Markets. Where’s the SEC?. Barron’s. June 6, 2025.
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