Professor Glenn A. Okun
The Rabid Capitalist: The Big Point is a brief summary of a detailed note available to paid subscribers.
Some commentators, including the Wall Street Journal, have finally noticed the IPO market’s slumber and its damaging effects on venture capital fund performance. While there has been a rebound in the performance of the Renaissance IPO index (ticker symbol: IPO), the underlying returns generated from new issues from 2020 through 2024 have been horrible. Some venture capitalists have shelved offerings for portfolio companies hoping for an IPO market recovery in 2025. It is far more likely that a rebound will be delayed until 2026 to 2028.
The recovery in the Renaissance IPO Index (ticker symbol, IPO) is little conciliation to investors in the broader new issues market.
Unfortunately, an examination of intermediate-term IPO returns illustrates the fundamental problems in this market. There are no obvious signs of a new issue market rebound.
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