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Given the macro landscape and wave of AI innovation we’re currently living through, what does it actually take to go public in 2025?
NYSE interviewed senior partners at three VCs to help answer this question. These partners have been taking companies public for decades across all kinds of market cycles (from web to cloud to mobile), which should mightily equip them to weigh in on this consideration.
The VCs we’re referring to are Insight Partners (IPOs include Shopify, Twitter, and Smartsheet), NEA (IPOs include Cloudflare, Salesforce, and Robinhood), and ICONIQ Growth (IPOs include Uber, Sprinklr, ServiceTitan, and Snowflake). So, yes, quite the accomplished list.
FactSet data for IPOs over $50 million in size (not including SPACs) shows activity for 2025 as of May 22 at $11.9 billion deal value across 23 transactions, including Hinge Health, MNTN, and eToro in May, versus $14.8 billion in deal value across 32 transactions for the same period in 2024. The numbers are slightly down, but the potential is certainly still alive.
With this in mind, the waters appear (currently) warm. What do the experts have to say? Let’s get into it.
How big do you need to be to go public?
The short answer: It depends. Your company must meet a general threshold to ensure your offering size is worthwhile. But this threshold isn’t set in stone because every company is unique.
For software companies in particular, Ryan Hinkle, managing director at Insight Partners, said size does, in fact, matter.
“There’s no literal line, but you need an offering of sufficient size to make it worthwhile,” said Hinkle. “And I’m just going to round that to $250 million. If you’re having an offering of less than $250 million, I think you’re getting pretty thin in likelihood. And you’re not going to do a $250 million offering for 40% of the company. That’s not how it works.”
“Most companies wouldn’t want to be public at just $100m of ARR,” he continued. “So you have all these constituencies, that series of paradoxes that it takes to get public: What the underwriters and investors want isn’t necessarily the same as what the management teams want or what the existing boardroom wants.”
Hinkle underscores a pivotal consideration with the mention of all the hands, internal and external, that leave fingerprints on a company’s public offering. Think of it like a balancing act more than a magic, one-size-fits-all solution. What can investors afford? What does the C-suite think? And what does the boardroom want? Ensuring this mix of components doesn’t result in contradictions or shaky foundations is paramount. Hinkle says you need four “yeses” from these different constituents for a green light.
Will Griffith at ICONIQ Growth highlights the importance of having an offering big enough that is worthwhile for institutional investors to participate. “Generally, companies are looking to operate in that 8-12% range from a dilution standpoint. So depending on what you're looking at from a size of IPO, if it's going to be $800 million, and you're looking at 10%, you're generally going to be around $8 billion [market cap]. And if it's $8 billion and you're trading at 10 times, then ideally you have $800 million in terms of forward revenue to kind of have things back into what that scale might be.”
But beyond considerations of scale, there is another important factor to going public: predictability. In other words, is this a company akin to the Googles and Apples of the world, where they operate in a dependable way regardless of their size or influence?
Christine Edmonds of ICONIQ Growth draws from ICONIQ’s 2025 Path to IPO Report in her answer, concurring that there’s no single, unmovable threshold.
“When it comes to scale, I don't think there's necessarily a threshold at which all of a sudden it becomes magically an opportunity to become a public company, but I think what it lends itself to is a very predictable volume of customers where you can drive that beat and raise motion,” Edmonds said. “We've seen that the top-performing IPOs are able to beat their revenue projections by closer to 3%–5%, relative to all companies [that] are in sort of the 1%–2% range.”
Scott Sandell, NEA’s executive chairman, gives this notion more color. “You want to be a rapidly growing company, but I come back to predictability. Predictability is really the critical thing for going public,” he said. “It’s very hard to change all four wheels in a moving bus, and once you’re a public company, that’s what it looks like. And you want to be out in the size territory where you have enough liquidity to have broad investor participation in the transaction.”
Now…or later?
What should companies ask themselves when determining if they’re ready to go public?
Another million-dollar question (possibly literally).
The truth is not every company should go public. In fact, some companies that aspire to reach the public markets should probably consider remaining private, at least for a few more iterations. Understanding if this pertains to you comes down to assessing your product or offering with a critical eye on how it’s currently running and what it’ll take for it to uplevel if need be.
Many companies benefit from staying private for longer because it lets them tie up loose ends and revitalize lagging builds before going public. After all, you don’t want your profitability impacted by metaphorically cosmetic errors and/or hardware fixes. Doing this before going public also often looks more polished.
NEA’s Sandell calls back his point on predictability.
“I’m probably starting to sound like a broken record with respect to predictability, but what’s behind predictability?” he said. “You have a product line which you can take to customers. You can predictably grow that business. What kind of a return you’re going to get by hiring the next salesperson or running the next advertisement.”
He also touches on our point regarding innovation.
“Do you anticipate that in order to maintain that growth, you’re going to have to invest significantly in innovation?” he said. “Because that’s hard to do in the public market if it detracts meaningfully from your ultimate profitability. So we have companies in our portfolio that have chosen to stay private because they had a big innovation agenda.”
Sandell cited Databricks as an example of a company meaningfully benefitting from staying private longer.
“Rule of 40 has been a really important metric,” says Will Griffith of ICONIQ Growth. “There’s really more emphasis and value placed on the growth side of that relative to the free cash flow side. And in particular, in today’s environment, that’s roughly a trade of around 2.3 times relative to one margin improvement in profitability…And we’ve seen over time, there’s actually a pretty strong correlation in lower interest rate environments where the Rule of 40 and that multiple is higher in lower interest rate environments where growth is going to be higher prioritized.”
“So growth is really prioritized in this market,” Will continued, “and something that I think companies need to be thinking about is the top priority when we think about going public and sustaining the high multiple in the public markets.”
How does this cycle stack up?
When compared to other supercycles that investors have invested through (web, e-commerce, mobile, social), how does our current cycle compare?
As you might have guessed: It’s time to talk about AI.
“There are two things to keep in mind,” said Sandell. “One is the cyclicality of the venture business itself and then the secular trends that layer on top of that. We’re in a secular trend of AI, and I would say we’re pretty early on in that. That will probably run 10 or 20 years, maybe 50 years.”
Thinking about the lifecycle of a “trend” like AI is a deeply important context to keep in mind. Is AI the star of this cycle? As Sandell mentioned, he thinks it’s too early, but he thinks AI is a budding understudy.
We’re also in the middle innings of a cyclical change in the venture industry,” Sandell added. “Obviously when interest rates went up, risk went off, not just in the public markets but [also in] the private markets. Capital flowing into the ecosystem dried up substantially. And so everything drives sort of a purging of the ecosystem that I think we’re coming out of now.”
As the beginning of a cycle approaches, the ground seems fertile. So, which companies sprouted through the soil? Sandell said “the really great companies” have survived.
“They’re getting funded, they’re growing fast, but it was a big readjustment,” he continued. “It wasn’t that long ago that it was growth at all costs, and now all you hear about is the Rule of 40 and when you’re going to be profitable and so forth. So I think we’re in the middle innings of that transition. The IPO market is still relatively nascent, but there’s no doubt it will become more and more attractive because more and more of these companies have matured to the point where it makes sense for them to go public.”
This cycle does not appear radically different from previous mega hitters. While trends and lifecycles vary in strength and size, potential doesn’t just still exist for companies looking to go public. It’s currently growing in multiple elements of the market by the day.
Final thoughts
Going public in 2025 isn’t just a reflective result of the year’s characteristics; it’s also reflective of a company’s timing, security net, dependability, and capability to set foot into yet another supercycle.
If you’re looking for a dependable partner to go public with, team up with one whose legacy spans every change, pivot, and growth spurt in recent memory: NYSE.