Navigating the New MedTech Playbook: Capital Strategy, Discipline, and the Path from Breakthrough to Market

Navigating the New MedTech Playbook is a series from Stifel Venture Banking’s Life Sciences & Healthcare team focused on the operational and financial realities shaping today’s medtech market. Drawing on conference takeaways, client work, investor conversations, and patterns observed across the life sciences ecosystem, the series explores the strategies, decisions, and market shifts shaping how healthcare companies scale in a more disciplined capital environment.

After a multi-year drought, the MedTech IPO market returned in 2025. 

Per RSM US, 2025 IPO activity on U.S. exchanges surpassed the combined totals of 2023 and 2024. Several offerings were received meaningfully well by the market: 

• Kestra Medical raised $202 million in an upsized offering
• Heartflow closed a $364 million IPO
• Medline completed what was reported as the largest private equity-backed IPO of all time, raising more than $8 billion

Despite the increased activity, about half of the IPOs since the beginning of 2025 are trading below their IPO issue price, with the market rewarding companies with greater revenue scale and consistent execution.

What the Open Window Rewards

The profile of a company that can successfully access public markets today is much stronger than it was in 2021, when the window was genuinely wide and the bar considerably lower. 

Based on observations from Milo Bissin’s panel on public market dynamics at LSI, the revenue benchmark for a successful traditional IPO has historically been ~$50M scaling to $75M; however, that is shifting higher towards ~$75MM scaling to $100M or more. That revenue should be paired with a story around indication or product expansion and a demonstrable track record of predictable execution. 

Predictable execution means the company has shown it can do what it said it would do, on the timeline it said it would do it. This is the criterion that eliminates many promising candidates because it can only be demonstrated over time and cannot be manufactured at the point of IPO preparation.

The IPO class of 2025 reflected this shift. Investors remained selective, rewarding companies with meaningful revenue scale, predictable execution, and a compelling path for continued growth. Companies that couldn’t demonstrate those characteristics generally faced more conservative valuations.

Why Missing Early Guidance is Costly

One of the most important dynamics of the post-IPO environment is the asymmetry between how credibility is built and how quickly it can be lost. 

Companies that go public and meet or beat their first several quarters of guidance build a durable foundation for their public market story. Companies that miss early guidance even once, even with a plausible explanation, face a credibility challenge that can take years to fully recover from.

This asymmetry has a practical implication for IPO timing. Going public before a company is genuinely ready to execute predictably against public-company expectations is one of the most common and most costly mistakes in the MedTech market. 

The pressure to go public when the window is open is real. But the cost of going public before the business is ready to perform as a public company is often higher than the cost of waiting.

The companies that navigate this most successfully tend to have done significant work before the IPO to ensure that their first year of public guidance is ambitious enough to get excited about the growth potential, but also realistic enough that it won’t miss the numbers. The discipline of setting and then meeting  or beating expectations is the foundation of the public market credibility that everything else depends on.

No Single Path to Liquidity

A traditional IPO is not the only path to public market access, and it isn’t always the right one. The MedTech liquidity landscape includes several viable structures, each with different characteristics that suit different company profiles.

Traditional IPO

The traditional IPO process offers the most institutional validation and the broadest access to public market capital. 

It also carries the most demanding requirements. 

The revenue benchmarks, product or indication expansion, and execution track record described above apply most directly here. For companies that meet that profile, a traditional IPO remains the most powerful liquidity option.

SPAC and Alternative Structures

SPAC structures fell out of favor after the 2021 wave produced a number of high-profile underperformers, but they remain a legitimate option for companies with the right profile. 

The key advantage of a SPAC (or reverse merger) is speed and flexibility. The path to public markets can be significantly shorter, and the structure can accommodate companies that don’t fit the traditional IPO profile. The key disadvantage is that the institutional signal is weaker. Scrutiny applied to post-SPAC companies by public market investors has increased meaningfully since 2021.

For companies evaluating this path, the honest question is whether the speed and flexibility advantages outweigh the reputational and valuation considerations. Some will find the answer is yes. 

Getting there requires a clear-eyed assessment rather than a default assumption in either direction.

M&A as a Liquidity Path

The M&A environment has remained active throughout the period when IPO activity was constrained. For many MedTech companies, a strategic acquisition represents a more realistic and attractive liquidity path than public markets.

Large strategics have continued to make acquisitions in high-growth areas like cardiovascular, neurovascular, and neuromodulation/chronic pain. Mid-cap companies have been increasingly active in tuck-in acquisitions that enhance core capabilities.

Management teams should have regular informal touchpoints with all the major strategics that are viable M&A options. Typically, a well-positioned MedTech company will dual track formal strategic M&A conversations alongside a traditional IPO roadshow, and the historical interactions play a role in making that process as efficient and competitive as possible.

The strategic value a company can command from a well-positioned acquirer can exceed what public markets would offer, particularly for companies that haven’t yet reached the scale required for a successful IPO. And the process of positioning a company for M&A is largely the same work required to position it well for public markets.

Staying Private Longer is Increasingly Viable

One of the most significant structural shifts in the MedTech capital environment over the past several years is the expansion of private capital available at scale. 

Venture capital dry powder remains at record levels. Multi-stage private investors have expanded their willingness to support companies through later stages of development. And the quality of the companies in the private market has increased accordingly.

The practical implication is that the urgency to go public has decreased for companies attracting late-stage private capital. A company with strong clinical data, clear reimbursement dynamics, and a credible path to commercial scale can often raise the capital it needs privately, on better terms and with less execution risk than a premature public offering would carry.

This doesn’t mean staying private indefinitely is always the right answer. 

Public markets offer access to capital, strategic currency, and institutional validation that private markets can’t fully replicate. But the decision to go public should be made because the company is ready and the conditions are right, not because private capital has run out or the window happens to be open. 

The companies that go public from a position of genuine readiness consistently outperform those that go public under pressure.

Implications for Founders Thinking About the Path to Liquidity

The IPO window being open is good news for the MedTech ecosystem. It validates the sector, creates strategic currency for well-positioned companies, and signals that institutional investors are willing to underwrite the long development cycles that MedTech requires. 

But the selectivity of the current environment means that the window’s openness is not evenly distributed.

The founders best positioned to take advantage of it are the ones doing several things well simultaneously. They are building toward the revenue scale and growth potential that public markets reward. They are establishing a track record of predictable execution. They are engaging with investment bankers and potential investors well before they need to, so that the relationships and the narrative are already in place when the process begins. And they are thinking carefully about which liquidity path actually fits their company’s profile and their investors’ return requirements.

The window is open. Whether it’s open for any particular company depends on the work that has been done to get ready for it.

Stifel Venture Banking is a division of Stifel Bank, Member FDIC. For informational purposes only. Stifel Bank does not provide legal, tax, or other advice.