NEW YORK (Reuters) - WeWork owner The We Company faces strong headwinds in achieving its goal of launching an initial public offering (IPO) by the end of the year after postponing it this month, fund managers and capital markets professionals said.

FILE PHOTO: The WeWork logo is displayed on the entrance of a co-working space in New York City, New York U.S., January 8, 2019. REUTERS/Brendan McDermid/File Photo

The U.S. office-sharing startup was getting ready to launch an investor road show for its IPO this week, before making the last-minute decision on Monday to stand down following a lackluster reception from investors, people familiar with the matter said.

Reuters reported last week that We Company was considering seeking a valuation in its IPO of between $10 billion and $12 billion, a dramatic discount to the $47 billion valuation it achieved in January.

We Company is hoping it can kick off its IPO as early as next month, once it has updated its quarterly earnings with what it hopes to be a strong financial performance between July and September, according to people familiar with its thinking. We Company declined to comment.

However, it runs the risk of coming up against weak IPO market demand because many fund managers become more risk-averse in the fourth quarter, as time runs out to make changes to their portfolio before they close their books for the year.

“WeWork’s decision to delay its IPO only days before the road show, until sometime before year-end, hinders its ability to control the narrative,” said Dan Morgan, senior portfolio manager at Synovus Trust in Atlanta.

We Company is looking to raise at least $3 billion in its IPO. Since 2001, there have been 21 such sizeable U.S. IPOs which raised in excess of $3 billion, of which only two were in October, one came in November and none in December, according to financial data provider Refinitiv.

This puts the heavily loss-making company in a bind. It must raise at least $3 billion in an IPO before the end of 2019 as part of a $6 billion debt deal it agreed with banks last month, or find alternative funding, according to people familiar with the matter.

“Going out at the end of the year means the overlap of Thanksgiving to Christmas. No one is home. They need to go out and they likely will in October or early November,” said Duncan Davidson, general partner at Bullpen Capital, an early-stage venture capital investment firm.

We Company’s chief executive, Israeli-born Adam Neumann, is also reluctant to pursue an IPO around the Jewish holidays, according to people familiar with the matter. Rosh Hashanah and Yom Kippur fall on Sept. 29-Oct. 1 and Oct. 8-9 respectively.

CEO ‘HUMBLED’

We Company’s decision to delay its IPO indicates it did not feel confident that the corporate governance changes it unveiled on Friday, slightly loosening Neumann’s grip on the company, were enough to woo investors concerned about its lack of a path to profitability.

In the run-up to the launch of its IPO, We Company faced concerns about its corporate governance standards, as well as the sustainability of its business model, which relies on a mix of long-term liabilities and short-term revenue, and how such a model would weather an economic downturn.

In a sign of contrition, Neumann told staff on Tuesday he had been “humbled” by the IPO effort so far and said he had lessons to learn about running a public company, the Financial Times reported, citing people who saw the presentation.

“Coming back, retapping the IPO market and trying to get a better reception is going to be about the company showing more progress than it’s shown this time, to make investors more comfortable with WeWork,” said Kathleen Smith, principal at Renaissance Capital, a provider of institutional research and IPO ETFs.