Public markets have long been the natural home of firms transitioning from start-up to established company eyeing growth. Yet in recent years, a troubling pattern has emerged. Promising companies have pulled back from IPOs, market debuts have often disappointed, and an over-reliance on private capital has crept into the system. The reasons are many, but at the heart of the issue lies a fundamental flaw in the traditional model of going public. Regardless of how the wider market is faring, shares need to be sold ahead of their bell-ringing ceremony.

A new approach is needed. An approach that fundamentally rethinks this model. In essence, something that allows firms to list first and sell later, on their own terms, when the timing is right. This shift may seem subtle, but its impact could be transformative; giving companies the ability to enter public markets without being forced into a share sale when conditions are uncertain or unfavourable. In today’s unpredictable market environment, this flexibility could mean the difference between a successful listing and a failed one.

For up-and-coming firms, this proposition also gives companies the space to grow, deliver on milestones, and build stronger business fundamentals. It also provides them time to prove their story to the market, where they can command a valuation that reflects their true potential. This means they can avoid the pressure of discounting their shares simply to meet minimum distribution requirements or to satisfy short-term investor appetite.

In stark contrast, private markets, while offering flexibility, are inherently limited. They restrict participation to a small pool of institutional or accredited investors, often behind closed doors, and with varying standards of governance and transparency. Private markets are increasingly being seen as an alternative to public markets, yet they are not a like-for-like comparison, with public markets offering broader access, regulatory oversight, and long-term credibility. However, it is the case that the latter must evolve to meet the needs of issuers who don’t think these features are as attractive as they once were.

A new model has been implemented in Spain, one that allows companies to be listed without the immediate obligation to sell shares, bridging the gap between private and public. Preserving the rigour of public markets, companies must still meet full disclosure standards through a traditional prospectus, but the binary pressure of going public via an immediate share sale is lifted. It also aligns well with recent regulatory changes, such as the updated European Union (EU) Listing Act, which lowers the minimum shareholder distribution requirement to 10%, further enabling this more gradual approach.

The European Commission is already fast-tracking initiatives tied to the Savings and Investments Union, but national regulators need not wait for Brussels. Here in Spain, the market supervisor, CNMV, in consultation with the Spanish Exchange and key market participants, has already begun the process of addressing these challenges creating a market fit for purpose.

Critics may argue that delaying a share sale risks low liquidity or weak market signals once trading begins in earnest. However, this model is not about avoiding the market but preparing for it properly. Companies can take the time to engage investors, craft their narrative, and build a stable shareholder base. Subsequently, this will lead to more successful offerings and stronger long-term performance.

There is a growing demand for a direct response to the needs of companies that want to grow through public capital. However, this will be on their terms, not at the mercy of the market. It’s about offering a more flexible, founder-friendly path that doesn’t compromise on transparency or investor protections. It’s all about putting time back in the hands of those who need it most. Ultimately, in capital markets, the greatest edge isn’t just capital, it’s the freedom to choose when and how to use it.