There are a number of company specific factors that contribute to a successful IPO. Revenue growth and profitability are incredibly important factors for public investors, both on a historical basis and on a projected one to two year outlook. An above average and consistent revenue growth rate indicates to an investor three possible scenarios. One, the company is adding new customers. Two, existing customers are loyal and they continue to spend more. And three, there is a lower churn amongst existing customers compared to new customer acquisitions. One or more of these scenarios are positive stories for the public market and will help convince IPO investors of the strong future prospects of the company. Profitability is rare among many startups and even some unicorns preparing for an IPO may not yet be profitable in lieu of actual EBITDA or net income profit margins. What most public market investors are looking for is a clear path to near term profitability. They expect the companies to show them how they plan on achieving profits in the short term.

Other factors that contribute to a successful IPO and are viewed positively by public market investors are a unique competitive advantage in the market and a market with high barriers to entry. A differentiated product or service that can be scaled to new markets globally. And experienced and respected management team with a board of directors made up of mostly non-executive directors with relevant experience working with publicly traded companies and stellar credentials or brand name recognition. The timing of an IPO is highly dependent on positive economic market trends. When global economies are experiencing negative or lack luster growth due to inflation, stagnation or geopolitical turmoil, VC funds typically defer the timing of an exit via an IPO. This is to avoid the bad investor sentiment that would happen if post IPO trading didn't sustain good results. If this happened, it would negatively affect a VC fund's ability to exit other investments with the IPO market In the future, it would affect their reputation.