Expectations Improving for IPO Market in 2013

KPMG has released a poll today showing bullish sentiment on the market for initial public offerings (IPOs) along with continued economic improvement in 2013. The report shows expectations for more investment in early- and expansion-stage companies, as well as a continued optimism remaining for IPO activity. The poll is a survey of the U.S. audit, tax and advisory services community, including more than 700 venture capitalists, professionals and entrepreneurs.

Some 26% of respondents expect the economy to stay the same, while only 15% expect an economic downturn. The entrepreneurial community was even more optimistic about IPO activity. This showed that about 66% expecting an increase, and only 11% anticipate a decline in IPO activity.

The outlook was even broken down by industry. As we have become used to, technology is the most expected beneficiary at 39%, followed by health care and life sciences at 25% and energy at 19%. Early-stage and expansion-stage companies appear to have the most promise: 40% in expansion stage was called the most promising, with 35% calling for early-stage as the most promising.

KPMG also expects to see entrepreneurs build new companies leveraging the advances in cloud computing, social media and mobile devices. Here were some of the hurdles and obstacles that are said to be of concern: 28% cited increased volatility in the public market, 27% worried about the fallout from the poor performance of major IPOs in 2012, 17% talked about limited funding, another 17% worried about M&A offering a better alternative, and finally 11% worried about compliance requirements.

Coincident with this KMPG report, 247 Wall St. has in recent days noted the most recent IPOs that are up 50% to 100%, and we could not help but notice how many early-stage and seed-stage companies are tied to the explosive trends around microbreweries.