01 Apr Why aren’t there more tech IPOs in Massachusetts?
While a recent report from the federal government said that the state of Massachusetts' tech industry is healthy, that is not how some see it in the wake of the state's lack of public IPOs. Initial public offerings have to do with the price of stocks when a private company is made public and anybody can become an investor in the organization.
According to the researchers at Renaissance Capital, a firm that researchers IPOs for all different kinds of industries across the country, there have been zero tech IPOs in the state of Massachusetts so far this year. That is down sharply from the one that was made available in the first three months of last year.
The researchers at Renaissance Capital say that trend is likely to continue throughout 2015, although it is not a problem that is affecting solely Massachusetts. According to the group, tech IPOs are down across the entire country, as more and more companies are opting to stay private and not go public.
"I expect there will be fewer IPOs this year," said Matt Kennedy, an analyst at Renaissance. "But that's true of the IPO market as a whole."
Experts in the tech industry say that the lack of IPOs is the dearth of private funding at high valuations. In other words, because these privately-held companies can get their money from investors, they do not need the influx of capital that would become available should they go public. The volatile currency markets also have an influence over a company's ultimate decision.
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