2021 was a banner year for traditional IPOs and SPAC IPOs, a stark contrast to the 2022 IPO market, which was one of the slowest in more than a decade. The outlook is favorable for an increase in IPO activity in 2023.

Among the lessons learned from the 2021 IPO rush has been the importance and extent of the preparation needed for private companies to seamlessly hit the ground running on Day 1 as publicly traded companies. Tell-tale signs of inadequate preparation were apparent in many cases through the 2021 IPO rush, with symptoms in the form of missed financial reporting deadlines, restated financial statements, newly uncovered material weaknesses in internal control over financial reporting, unanticipated costs and missed earnings forecasts, recognizable inability to execute on promised growth strategies, and ultimately investor loss of confidence and disappointing stock price performance in the secondary market. 

As private equity firms are weighing exit options and liquidity paths for their portfolio companies, the current market slowdown can be used as an opportunity to conduct an IPO Readiness assessment, and execute on the necessary steps to get ready and stay ready for when the IPO opportunity is right or pursue a dual track for alternative deal opportunities.