The Changing Profile of Venture-Backed IPOs in 2025

The IPO window is open again, but it does not look like the one the last cycle got used to. After several years of muted activity, a trickle of new listings has returned to public markets. Yet, as Silicon Valley Bank’s State of the Markets: H2 2025 report makes clear, today’s IPO candidates are very different from the high-growth, cash-burning stories that came to market in the 2010s.

The report treats the reopening of the IPO market as a structural shift rather than a simple restart. Companies are arriving later, with more revenue and leaner operations, and they are being evaluated by investors through a different lens. The change says as much about the evolution of private markets as it does about public ones.

A Higher Bar for Going Public

SVB’s data shows that the average revenue of venture-backed technology companies at IPO has risen sharply over the past decade. In the early 2010s, typical revenue at listing was under $200 million. By the 2022–2025 cohort, average revenue at IPO has climbed to more than $500 million. The bar to step onto public markets has moved materially higher.

On the growth side, the shift is even more striking. Investment bankers still speak in terms of the “rule of 40,” and many continue to argue that the healthiest candidates combine strong revenue growth with improving margins. Historically, a 30% annual growth rate was often cited as a benchmark for attractive IPOs. The realized numbers look different. SVB notes that the average annual revenue growth for IPOs between 2022 and 2025 was around 9%, far below the growth rates of the last cycle’s momentum listings.

Put simply, companies are waiting longer, building larger revenue bases, and going public with slower growth profiles than in the past. The archetype has shifted from early, fast-growing disruptors to more mature businesses that already resemble their public-market peer set.

The Changing Economics of Being Public

Beyond market sentiment, the mechanics of being a public company continue to influence when and whether firms list. Underwriting fees for US IPOs typically consume between 4-7% of the capital raised. On top of that, the report notes that ongoing costs, covering regulatory compliance, reporting, and governance, can add roughly 0.4% of market capitalization each year.

These recurring expenses fall more heavily on smaller issuers. For mid-sized technology companies, the fixed cost of being public can be meaningful relative to their scale, especially in an environment where late-stage private capital remains available from crossover funds, growth investors, and secondary buyers. When companies can raise sizeable rounds or provide liquidity privately, the trade-off between public visibility and public-company overhead becomes more finely balanced.

In that context, it is not surprising that many firms have chosen to stay private longer, using secondary transactions and late-stage rounds to provide partial liquidity to early shareholders rather than rushing toward an IPO.

From Growth Rockets to Revenue Tanks

SVB describes today’s typical IPO candidate as a “revenue tank” rather than a “growth rocket.” The phrase captures a shift in investor preference from rapid top-line expansion toward cash-flow resilience and operating discipline.

Companies that are now coming to market usually have more established revenue models, tighter burn, and smaller relative headcount than the cohort that listed during the peak of the 2020–2021 cycle. Many have already undergone cost-cutting or efficiency programs in private hands, arriving in the public markets with a clearer line of sight to sustained profitability.

This does not mean growth is irrelevant, but it does mean that public investors appear more willing to accept lower growth in exchange for stronger unit economics and more predictable earnings. The trade-off is that fewer pre-product or early-scale stories are making it to market. The IPO has become a milestone that reflects operational maturity rather than a funding tool to finance the most aggressive phase of expansion.

Implications for Private Markets

The evolution of the IPO profile has knock-on effects throughout the venture ecosystem. Later, more selective listings lengthen the time between a fund’s initial investment and its eventual liquidity, stretching hold periods and increasing the importance of private-market secondary mechanisms.

For general partners, slower exit cycles mean distributions to limited partners can be more back-weighted, and performance may rely more heavily on a smaller number of eventual IPOs or large trade sales. For founders and early employees, the path to liquidity often involves multiple private rounds, partial secondary transactions, or strategic acquisitions rather than a straightforward progression from Series A to IPO within a short time frame.

SVB’s analysis suggests that for many venture-backed companies, remaining private for longer is no longer a sign of delay but a deliberate choice that reflects both the availability of late-stage capital and the higher expectations attached to public status. The IPO remains an important outcome, but it is now one option among several rather than the assumed default.

A Different Kind of IPO Era

Taken together, the data in State of the Markets: H2 2025 points to an IPO market that has evolved rather than disappeared. New-generation listings are larger in scale, slower in growth, and leaner in operations than their predecessors. The companies that make it through the window have typically already proven their resilience in private hands and are stepping into a public environment where scrutiny on margins and cash flow is higher.

The trade-off is clear. The modern IPO is less about funding a leap into the unknown and more about formalizing a transition into a mature, durable business. In that sense, the “IPO 2.0” landscape reflects a broader recalibration across the innovation economy: capital is still available, but the bar to access public markets has risen, and the reward is increasingly reserved for companies that combine scale with discipline rather than speed alone.

Brand Manager

Aayushi Thakur

Frequently Asked Questions

Q: How are venture-backed IPOs in 2025 different from earlier cycles?

A: They’re larger, slower-growing, and more mature, with higher revenues at listing and clearer paths to profitability than the 2010s cohort.

Q: Why are companies going public later now?

A: Abundant late-stage capital and secondary liquidity let firms raise money and provide partial exits privately, so they wait until they are more scaled and efficient before listing.

Q: What does “revenue tank” versus “growth rocket” mean?

A: “Growth rockets” prioritised rapid expansion with high burn; today’s “revenue tanks” are bigger, steadier businesses where investors focus more on durability and cash flow.

Q: How do public-company costs influence IPO decisions?

A: Underwriting fees plus ongoing regulatory and governance costs make being public relatively expensive for mid-sized issuers, which can tilt the balance toward staying private longer.

Q: What does this mean for founders, employees, and VCs?

A: Liquidity is spread over time through later rounds, secondaries, and selective IPOs or M&A, and venture funds may face longer holding periods before returning capital to LPs.

Sources

1. State of the Markets: H2 2025. Silicon Valley Bank, 2025.