In recent years, many middle-market private equity funds have (rightfully) viewed IPOs as a refinancing mechanism for performing portfolio companies, instead of an avenue for exit. 

With the smashing success of ServiceTitan's IPO in the post-ZIRP era, the case is being made for middle-market PE funds and management teams who would normally not find an IPO path appealing to reconsider their options, especially as market demand is signaling a significant appetite for new publicly-traded companies.

With this change in public market sentiment, the “dual-track” process may roar back as leaders evaluate testing the IPO waters while simultaneously marketing the business to other PE funds or strategic buyers. Regardless of whether PE sponsors are deciding between an IPO journey versus a strategic sale of a company, the processes can be complex. While the IPO process will typically continue to be a bigger lift for middle-market companies, a portfolio company still needs to ensure sell-side readiness in order to pass the diligence required by a PE or strategic buyer and culminate in a successful transaction close. The similar efforts required for either route will certainly narrow the decision gap.