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With Startup Pileup, Tech IPOs Face Tough Investors

  • Less private funding may mean more startups turn to IPOs
  • Better balance sheets will be needed for higher valuations

Expect a resurrection of technology initial public offerings in 2016 as private fundraising options cool. But when it comes to valuations, it may not be pretty.

After a slow year for tech IPOs, market-bound companies will need to show profitability -- in addition to lofty promises of sales growth -- before investors are willing to pile into share sales the way they have in the past.