As privately held companies choose to remain private longer and defer their initial public offerings (IPOs), these companies are increasingly reliant on raising capital in successive private placements. New categories of investors, including cross-over funds, sovereign wealth funds, and family offices, have become significant participants in late-stage (or mezzanine) private placements. Depending on the sector, a late-stage private placement may be an important step for a company. For example, a late-stage private placement may provide needed capital to allow the company to defer its IPO until the IPO market becomes more hospitable. The transaction may serve to provide liquidity to friends and family, angel and other early investors in the company. For companies in other sectors, such as life sciences, a late-stage private placement made to known and wellregarded life science investors may serve to validate the company’s product, drug or technology. Often, the investors will express an interest in participating in a subsequent IPO and this may be important to the IPO’s ultimate success.

In this survey, we have examined the late-stage private placements that preceded life sciences IPOs undertaken in 2015 and in 2016 (through June 30). In 2015, there were 61 life sciences IPOs completed. Overall, in 2015, there were 185 IPOs completed. Life science IPOs represented approximately 33% of the IPOs for 2015. In 2016, through June 30, there were 19 life sciences IPOs completed. Overall, through June 30, 2016, there were 44 IPOs completed. Life sciences IPOs represented approximately 43% of the IPOs for the first half of 2016.