75% of the top performing IPOs of the last 4 years went public at a valuation less than $1B
It's true. 75% of the top performing IPOs of the last 4 years went public at a valuation less than $1 billion. It's time to make the small cap IPO cool again. Tweets: @plevine , @glennsolomon , @mattstraz , and @chippaucek Tweets: Paul Levine / @plevine : Agree 100%. TRLA was a small-cap IPO - went public at $500m market cap, then grew value 5x as a public co. The capital and currency we raised in IPO were key to future success. http://twitter.com/... Glenn Solomon / @glennsolomon : Great argument for benefit of IPO discipline even for sub $1B cos by @GGVCapital's @jrichlive “The Majority of Top Performing IPOs Were Never Unicorns ” http://www.linkedin.com/... Matt Straz / @mattstraz : Becoming a billion $ company AFTER going public seems like a very reasonable path to building a business. Turns out it also leads to the best performing IPOs as well. http://www.linkedin.com/... Chip Paucek / @chippaucek : Excellent post. As the CEO of a company on his list, I couldn't agree with the @Zendesk comment more. Being public has made @2Uinc a better company. #IPO http://twitter.com/...
Context & Ripple Effects
This piece lands two years after floundering tech stocks raised questions about the IPO process and left IPO-bound unicorns stuck — the moment when staying private became the default ambition. The argument here runs against that current: Paul Levine notes TRLA went public around a $500M market cap and grew fivefold as a public company, while 2U's Chip Paucek credits being public with making the company better.
The timing was right: Dealogic counted ~$12.2B raised across 28 US tech IPOs in the first half of 2018, nearly double the prior year's pace, so the pipeline existed for smaller companies to test the thesis. Later data backed it up — an analysis of 166 tech IPOs from 2010 to 2019 found the 30 most valuable startups raised half as much capital yet produced nearly 4X the value of the 30 most funded.
First-order effects
- Founders and boards weighing an exit get a counter-narrative to the stay-private-longer playbook: GGV's Glenn Solomon and operators like Matt Straz are publicly endorsing sub-$1B IPO discipline, giving late-stage companies permission to list smaller.
Second-order effects
- Bankers and exchanges gain an incentive to rebuild the small-cap IPO product — underwriting, research coverage, and listing standards tuned to sub-$1B issuers — since the top-performer data suggests deal flow there outperforms mega-listings.
Third-order effects
- If capital-efficient public listings keep outperforming heavily funded ones, the industry structure shifts away from mega-round accumulation toward earlier liquidity, weakening the private valuation–liquidity gap that keeps unicorns priced without market discipline.
The trend: Venture-backed companies are drifting back toward earlier, smaller public listings as evidence mounts that IPO discipline creates more value than extended private fundraising.