Why companies stay private longer and what that means for investors
Why companies stay private longer and what that means for investors
Why companies stay private longer and what that means for investors
A decade or two ago, “going public” was a common step for successful tech and growth companies. Today, many companies wait longer before listing — and some never list at all.
That shift matters for anyone building a portfolio that includes public shares, private market exposure, or both.
What’s changed: the timeline to IPO has stretched
In the United States (one of the leaders in global capital markets), Jay Ritter’s long-running IPO dataset shows the median age of companies going public was around 8 years in the mid-1990s, compared with 14 years in 2024 and 12 years in 2025.
At the same time, the pool of public companies has not been growing. The U.S. SEC’s “Reporting Issuers” series shows total reporting issuers fell from 8,351 in 2023 to 7,902 in 2024.
None of this means IPOs have disappeared. Understanding the cycle helps: PwC’s Global IPO Watch reports global IPO proceeds rose from US$118.1b in 2024 to US$143.3b in 2025. The public market window opens and closes.
The bigger point is structural: more company growth is happening before the public market gets a look in.
Why companies stay private longer
There isn’t one reason. It’s a combination of funding, control, cost, and choice.
1) Private capital can fund very large growth plans
Private markets can fund rounds that used to be the domain of public markets. Late-stage venture capital, private equity growth funds, sovereign wealth funds, pensions, and “crossover” investors can write big cheques without a listing.
McKinsey’s Global Private Markets Report 2025 puts private capital assets under management (AUM) at about US$22 trillion in 2024 — a big pool of money looking for private opportunities. For founders and boards that can reduce the need to list just to access capital.
2) Being public is expensive and time-consuming
A listed company faces a much heavier reporting load, tighter disclosure rules, analyst coverage, and a constant spotlight on short-term results.
For some businesses, this can be a distraction. Especially if they are refining their product, expanding overseas, or investing heavily.
3) Control and culture matter
Staying private can let founders and early backers keep more control over decision-making, board seats, and company culture.
In public markets, ownership spreads. With that comes more external pressure and less freedom to make long-term calls that may look messy quarter to quarter.
4) There are more exit options than an IPO
“Exit” does not always mean “list”. Many companies sell to a larger acquirer, merge, or run secondary share sales that give early investors and employees partial liquidity without becoming public.
Secondary markets have grown, too, giving staff and early shareholders a way to sell some shares before a listing.
5) Public markets have become a tougher place for young growth companies
Public investors can be less patient with businesses that are unprofitable while they invest for future growth. When rates rise or sentiment turns, IPO pricing can be harsh and post-listing volatility can be high.
If a company can fund its plan privately, it may prefer to wait for better conditions — or skip the IPO route entirely.
What this means for investors
Australia has the same forces at work: more venture capital funding, more global private money, and founders who can choose to wait before an ASX listing — or take a different exit route.
For Australian investors, that can mean:
- fewer “early growth” stories turning up on the share market
- more interest in startup investing through managed private market products, with the trade-offs that come with illiquidity and long timeframes.
1) Public market investors may see companies at a more developed stage
If companies are listed at a more developed stage, public market investors may miss the earliest (and riskiest) growth years. The public market can continue to offer strong businesses, just at a different stage.
This can help explain why some of the most recognisable growth companies feel “older” by the time they IPO.
2) More growth is happening in private markets
If you want exposure to early-stage and pre-IPO growth companies, you’re looking at private market routes: venture capital funds, fund-of-funds vehicles, private equity growth strategies, direct angel investing, or crowd-sourced funding (CSF).
Each route comes with different risks, fees, minimums, access rules, and liquidity.
3) The trade-offs are real: time, liquidity, information
Private market investing is not a simple “swap” for buying listed shares.
Common trade-offs include:
- Illiquidity: money can be tied up for years, with limited options to sell early.
- Long timeframes: venture capital is usually measured in years, not months.
- Valuation uncertainty: pricing is updated at set intervals and can move in steps.
- Higher failure rates: many early-stage companies do not succeed.
- Manager selection matters: outcomes can vary widely across funds.
What to look for if you’re exploring venture capital or private market investing
This is not a checklist you must follow — it’s a set of questions worth asking before you commit money to any private market product.
- What are the expected liquidity terms?
Is it a closed-end fund with a long lock-up, or does it have a periodic redemption feature?
- How diversified is the exposure?
Is your capital spread across many companies and managers, or concentrated in a handful of bets?
- How are valuations set and reported?
How regularly are valuations updated, and what method is used?
- What fees apply, and what do you receive in return?
Fee levels vary by product type. Look for the disclosure of management fees, performance fees, and other costs.
- What is the fund’s approach to exits?
Is the aim a trade sale, secondary sale, IPO, or a combination? How long do investments usually take to play out?
- What investor protections exist?
What reporting do investors receive? Who holds the assets?
Where FB Ventures fits
At FB Ventures, we built an approach around one reality: more company growth often happens while companies remain private. Our goal is to make venture capital and startup investing easier to access and easier to understand.
- Invest: curated access to VC (venture capital) through our VC Fund of Funds structure.
- Learn: education that expands investor knowledge, including VC Allocator programs.
- Connect: events and community that put you in the room with founders, fund managers, and fellow investors.
If you want to go deeper, explore our Learn content and investor resources on the site.
Disclaimer
General information only. Not financial advice. Consider the Product Disclosure Statement (PDS) and Target Market Determination (TMD) and your circumstances. Capital at risk. Past performance is not a guide to future performance.
References:
Ritter, J. R. (2025). Initial Public Offerings: Median Age of IPOs Through 2025. University of Florida (Warrington).
U.S. Securities and Exchange Commission (SEC). Reporting Issuers.
PwC. (2025). Global IPO Watch 2025.
McKinsey & Company. (2025). Global Private Markets Report 2025: Braced for shifting weather.
McKinsey & Company. (2025). McKinsey on Investing — Issue 11.
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