The IPO Boom Is Not Reaching Emerging Growth Companies

If you only looked at the latest statistics from the Securities and Exchange Commission, you might conclude that the U.S. public capital markets are booming. In the first half of 2026, there were 208 initial public offerings raising more than $137 billion, according to recently released data from the SEC’s Division of Economic and Risk Analysis. That compares with 180 IPOs raising more than $27 billion during the first half of 2025. IPO volume increased approximately 16%, while proceeds increased nearly 400%.

Follow-on activity was strong too. The SEC reported 557 follow-on registered offerings raising more than $111 billion, compared with 505 offerings raising nearly $84 billion during the same period last year. That represents approximately 10% more offerings and 33% more capital raised. Those are encouraging statistics, and there is plenty in them to be optimistic about.

But look one level deeper and the picture becomes much more complicated. The number of corporate IPOs actually declined, and at the entrepreneurial end of the market, the disconnect becomes even more pronounced. That is the disconnect we need to start talking about.

A Strong Market Does Not Mean A Strong Market For Everyone

The SEC’s statistics are not wrong. Enormous amounts of capital are being raised, larger transactions are getting completed and follow-on offerings are active. There are very real reasons to be optimistic about the direction of the U.S. capital markets. But aggregate statistics can hide what is happening underneath them.

The capital markets are not one market. A billion-dollar company raising hundreds of millions of dollars does not operate in the same capital formation environment as an entrepreneurial company trying to raise $15 million or $20 million to commercialize a technology, expand a business, fund a clinical program or make the transition from private company to public company. Right now, those two markets are increasingly out of sync.

I strongly support the SEC’s stated goal of encouraging more small and growing companies to go public and stay public. But we should be careful about declaring victory based solely on aggregate IPO numbers. Are more operating companies actually gaining access to the public markets?

Look Beneath The Headline Numbers

The composition of the broader IPO market has changed. The SEC’s own data show that during the first half of 2026, 118 of the 208 IPOs were special purpose acquisition companies, or SPACs, while 88 were corporate IPOs. During the first half of 2025, by comparison, there were 111 corporate IPOs and 66 SPAC IPOs.

In other words, while total IPO volume increased approximately 16%, the number of corporate IPOs actually declined approximately 21%. SPACs are legitimate capital markets transactions and an important part of the ecosystem, and their growth should not be discounted. But a SPAC IPO is not the same thing as an operating company raising capital and entering the public markets. If the policy objective is to encourage more operating companies to go public earlier in their lifecycle, then we should be looking closely at corporate IPO activity.

The public markets are demonstrating that they can absorb substantial transactions and deploy enormous amounts of capital. The question for the entrepreneurial market is whether there is the same appetite for smaller transactions.

What The Entrepreneurial Market Actually Looks Like

Now compare the broader market statistics with what we are seeing at the entrepreneurial end of the market. During the first half of 2026, the Lucosky Brookman DataDesk tracked just 13 IPOs in the microcap and emerging growth segment. Those offerings raised approximately $424.6 million in total, with an average offering size of approximately $32.7 million.

But even those numbers deserve a closer look. One approximately $200 million offering accounted for nearly half of all of the capital raised in the segment during the entire six-month period. Excluding that transaction, the remaining 12 IPOs raised approximately $224.6 million, with an average offering size of approximately $18.7 million. One transaction substantially changes what the overall numbers tell us about the entrepreneurial IPO market.

That is a very different market from the one reflected in the broader statistics. The strength of the broader IPO market is simply not flowing down to smaller companies seeking public capital in the same way.

A market can raise an extraordinary amount of capital while simultaneously becoming less accessible to entrepreneurs and smaller companies. We actually see the same phenomenon within our own microcap data, where a single large transaction accounts for nearly half of all capital raised. Both can be true at the same time. That is the great capital markets disconnect.

We Need To Measure The Market From The Bottom Up

The SEC deserves credit for publishing more market data and giving investors, issuers and policymakers greater visibility into capital formation. But the headline statistics should be the beginning of the conversation, not the end. If we really want to understand the health of the U.S. public markets, we should look more closely at how that activity is distributed across the market.

That means looking at how many operating companies are actually going public, how many smaller operating companies are reaching the public markets, what is happening to transaction sizes, how many companies are raising less than $25 million and how much capital is reaching microcap and emerging growth issuers. We should also understand how many companies begin the IPO process but never reach the public market, and whether entrepreneurs are choosing alternative pathways because those structures are strategically superior or because the traditional IPO has become inaccessible.

A healthy capital market should not be measured solely by how much capital it can deploy at the top. We should also look at whether companies at the bottom have a viable opportunity to grow into the companies at the top.