"Do you see the trend? Companies are waiting longer to go public. What does this mean for index investors? Lost upside. Consider Amazon: IPO valuation: 23 billion Current valuation: 2.43 trillion Amazon is 105x bigger now than it was at IPO! If you held VTSAX, you had a piece of this incredible action! If Amazon had IPO'd at 500 billion, the upside would have only been 5x."
"Companies Staying Private Longer 2000s: Tech companies like Google went public relatively early (Google IPO'd in 2004 at ~$23B valuation). 2020s: Giants like SpaceX, OpenAI, Stripe, and ByteDance are valued in the hundreds of billions while still private. Why? Abundant venture capital and private equity money. SoftBank, Tiger Global, Sequoia, sovereign wealth funds, and others provide late-stage funding that reduces the need for IPO cash."
Private companies are staying private longer, with late-stage valuations often reaching hundreds of billions before any IPO. Abundant venture capital, private equity, and sovereign wealth funding provide firms with capital that reduces the need to access public markets. As a result, IPOs occur later or not at all, shifting significant growth and upside into the private market. Index investors who rely on public-market ETFs risk missing large pre-IPO gains that were previously captured at earlier listings. The delayed public listings can compress future public-market upside and change the opportunity set for broad-market investors.
Read at 1500 Days to Freedom
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