After several years of limited activity, the initial public offering (IPO) market is showing renewed momentum. U.S. IPO activity accelerated during the first half of 2026, with 62 IPOs each raising more than $50 billion in proceeds, compared with 34 during the same period in 2025. Private equity-backed IPO activity has also started to pick up, with IPO volume increasing from four transactions in the first quarter of 2026 to eight in the second quarter.
Several exceptionally large offerings have contributed considerably to the increase in proceeds, but the broader market reopening is still creating renewed opportunities for private equity sponsors and business owners considering an IPO as a potential exit path. An improving market, however, does not mean every company is ready to go public or that an IPO will ultimately provide the best outcome.
The practical takeaway is this: when exit opportunities increase, businesses that have already done the work to understand their value and strengthen their financial story are better positioned to act.
A More Active IPO Market Is Still a Selective One
Record proceeds do not necessarily mean the IPO market is open equally to every company. While dollars raised have surged, the number of companies going public remains relatively modest by historical standards, underscoring how selective the current market remains.
Investor interest has picked up, but the market is still selective. Private equity-backed IPO volume increased in the second quarter of 2026, while average IPO value declined. That contrast suggests a busier IPO market does not guarantee stronger valuations.
For owners and sponsors, the question should therefore go beyond, “Is the IPO market open?” A more useful question is, “Would our business be ready if the right exit opportunity presented itself?”
Answering that question starts with two fundamental areas: understanding what the business is worth and determining whether its financial performance can withstand increased scrutiny.
Start With a Defensible View of Value
Before considering an exit, owners need a realistic understanding of what the business may be worth today and what could affect that value tomorrow. An improving market can create optimism around exit valuations, but market conditions should not replace a thoughtful assessment of a company’s underlying value.
A business valuation can help owners and sponsors establish a realistic baseline based on the company’s financial condition, growth prospects, risk profile, industry conditions, and relevant market information. CRI’s Valuation professionals help determine the value of businesses, ownership interests, and intangible assets for transactions and other purposes.
As part of exit planning, a current valuation can help owners compare expectations with market realities, identify factors driving or limiting value, and understand how different growth, profitability, or market assumptions could affect a potential transaction. It can also reveal valuation gaps that management may be able to address before beginning an exit process.
Identifying those gaps early gives management more time to strengthen financial performance, reduce risk, or resolve issues that could affect how investors perceive the business.
Pressure-Test the Financial Story
Valuation is only one part of exit readiness. Buyers and public-market investors also want confidence that reported results accurately reflect the underlying economics of the business.
This is where financial diligence becomes critical. Management should be prepared to explain not only how the business has performed, but also why it has performed that way and whether that performance is sustainable. Areas that may warrant closer review include:
- Revenue and earnings trends;
- Recurring versus nonrecurring income and expenses;
- Support for EBITDA adjustments;
- Customer or vendor concentrations;
- Working capital requirements;
- Debt-like items and other potential obligations;
- Historical trends compared with forecasts; and
- The quality and consistency of financial reporting.
A quality of earnings analysis, for example, goes beyond traditional financial statements to evaluate the accuracy and sustainability of a company’s earnings. CRI’s Transaction Advisory Services team provides buy-side and sell-side financial diligence, quality of earnings analyses, working capital analysis, and other transaction support designed to help businesses and investors better understand the financial considerations behind a deal.
Looking at these areas before a transaction begins can help management spot potential questions or weaknesses before they become negotiation points or barriers to execution.
Keep More Than One Exit Path Open
Preparing for an IPO does not require committing to one. Many of the steps that strengthen IPO readiness, including establishing a defensible valuation, strengthening financial reporting, pressure-testing earnings, and organizing supporting documentation, can also better position a company for other potential transactions.
IPO windows can open and close quickly, so companies may need to adjust their plans as conditions change. A company that has already strengthened its financial reporting and completed key diligence may have more options if a strategic sale, private equity transaction, or another exit route ultimately makes more sense. Keeping more than one path open can also give owners and sponsors more flexibility to compare opportunities and choose the option that best fits their goals.
Exit Readiness Starts Before the Exit
Start with an objective look at where your business stands today. Issues that seem manageable during normal operations can draw much greater attention once investors or buyers begin looking closely at the numbers.
Waiting until a deal is on the horizon can leave little time to address issues that may affect value or slow the process. Leading private equity firms often begin formal exit-readiness planning 12 to 18 months before a planned sale, giving owners and sponsors time to identify potential obstacles and strengthen the business before going to market.
While not every business needs the same preparation timeline, the idea is the same: starting earlier gives owners and sponsors more time to address weaknesses, improve performance, and make thoughtful decisions about value before a transaction is underway.
Preparing for the Next Opportunity
The rise in IPO activity is an encouraging sign for businesses and stakeholders, but market momentum alone does not create a successful exit. The companies best positioned to capitalize on improving conditions understand their value, can support their financial story with reliable information, and maintain the flexibility to pursue the right exit strategy when the opportunity arises.
CRI’s Transaction Advisory Services professionals can help business owners and investors evaluate value, identify financial considerations that could affect a transaction, and prepare for potential exit opportunities. Contact your CRI advisor to discuss how your organization can strengthen its exit readiness and prepare for the next phase. Starting that work before an opportunity arises can give your team more options when market conditions align.