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IPOs Are Back – But With a Reality Check
The IPO market is finally showing signs of life — but most venture-backed startups are going public at lower valuations than their last private rounds. For early-stage founders, this is a reality check: hype is out, fundamentals are back.
Vasily Alekseenko
May 28, 2025
IPOs Are Back – But With a Reality Check
Why this matters even if you’re just trying to raise your first round.
According to an article published last week by S&P Global, after nearly two years of silence, the IPO market is finally showing signs of life.
This week, two venture-backed tech companies — Hinge Health and MNTN — are going public. And soon after, Chime, one of the most hyped fintechs of the last decade, will join them.
It’s not exactly a victory lap.
These aren’t blockbuster IPOs smashing past private valuations. In fact, they’re the opposite. These companies are going public at significantly lower valuations than what VCs paid during the boom.
Hinge Health is expected to IPO at a $2.9B market cap. That’s less than half its 2021 valuation.
MNTN, an adtech company, is eyeing a $1.3B IPO — down from $2B+ in 2022.
Chime, which once raised at a $25B valuation, is likely to come in below that when it finally lists.
These are what the industry calls “down-round IPOs.”
Not ideal. But not a death sentence either.
Just look at ServiceTitan. It IPO’d in December below its 2021 valuation — and its stock has since jumped nearly 80%.
Or CoreWeave, an AI infrastructure company, which IPO’d in March and saw its value jump from $19B to $23B within days. The momentum is real — even if the numbers aren’t as bloated as they used to be.
So, what changed?
A few months ago, no one wanted to touch the IPO button.
Global market jitters, trade war noise, and investor fatigue had frozen things solid. But now?
The VIX (volatility index) is calming down.
S&P 500 and Nasdaq have bounced back.
Public investors are cautiously optimistic — but demanding discipline.
“The IPO window is creaking open,” said Matthew Kennedy from Renaissance Capital. But investors are no longer buying into stories alone. They want fundamentals, sustainable margins, and a “margin of safety” on the price.
Why this matters if you’re pre-seed or seed stage 👇
You’re not IPO’ing next year. You might not even be raising a Series A yet.
But don’t scroll past this. Because what’s happening up there shapes what happens down here.
1. Exit pricing defines entry expectations
If IPOs are coming in lower than their last private rounds, that pressure works backwards.
Later-stage VCs are adjusting their benchmarks. And early-stage investors are following suit. That means founders raising today are being asked harder questions — not “how big can this get?” but:
→ “Can this become profitable?”
→ “Is this something the public markets would believe in — eventually?”
2021’s rules no longer apply. You need to be grounded in reality, not delusion.
2. The hype cycle is over — and that’s a good thing
Let’s be real: The last bull run was chaos.
Valuations made no sense. Some founders were celebrated for raising $30M without a product. And others with actual customers struggled to get a meeting.
Now? The noise is clearing.
Investors are no longer chasing unicorn dreams — they’re looking for clarity, traction, and grit. And that’s great news for real builders.
This is the moment where solid early-stage founders finally get to stand out.
3. Liquidity at the top = dry powder at the bottom
For the past two years, VCs haven’t been able to return capital. No exits = no LP payouts = no fresh money.
But now that IPOs are back — even at lower prices — capital is starting to flow again.
More exits → more distributions → more early-stage bets.
If you’re building now, your timing could be perfect. You’ll hit Series A just as VCs are feeling flush again.
Bottom line:
No one’s impressed by vanity metrics anymore.
The public markets are pricing in discipline — and the rest of the ecosystem is catching up.
If you’re an early-stage founder, this is your window to build something real while the hype merchants are still licking their wounds.
And if you’re an investor, this is the time to double down on high-conviction bets before the next cycle heats up.
*P.S. All data and quotes are from S&P Global / Dow Jones Newswires (via WSJ)
It’s time for a POLL (you can also login and leave a comment):
Would You Take a Down-Round IPO?Let’s say your startup could go public today — but at a valuation 40% lower than your last round. What would you do? 👀 We’ll share the results (and the drama) next week. |
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Vasily Alekseenko
Founder
@ Rare Founders
Rare Founders - building the bridge between founders and investors via regular in-person and online events, meetups, conferences.
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