When Giants Don’t Go Public: Inside the $5 Trillion Private Tech Market
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Why are the biggest growth tech companies staying private instead of going public?
If you actually want to invest in the highest growth, most promising companies that could be that next Mag 7, chances are they're in the private markets. You know, AI, first of all, I think these have the potential to be some of the best businesses ever created. They're run by exceptional founders. They're building products that have grown at rates that we've never ever seen before. So, you know, they're kind of speed running the process. Process of company growth. Models are improving at a like eye popping rate. You know, they can basically double their ability to complete long form tasks over six to seven months. And so, you know, if you were to just arrest model development today, I think we would have the chance to build ten to twenty years of really interesting applications on top of it.
Highly valued private tech companies now represent about $5 trillion in market cap, almost a quarter of the S P 500. Ten years ago, 88% of market cap creation for the best tech companies happened after they went public. For the recent crop of IPOs, 55% happened while they were still private. David George runs the growth fund at A16Z. This conversation, previously aired on Bloomberg's Odlots Podcast, covers why companies stay private longer, the SPV problem, why legacy software is getting crushed, and why outcome-based pricing could be the business model shift that finishes off incumbents. Bloomberg's Odlots hosts, Joe Weisenthal and Tracy Alloway, speak with David George, General Partner at A16Z.
Hello and welcome to another episode of the Oddlots podcast. I'm Jill Weisenthal.
And I'm Tracy Alloway.
Tracy, it feels like 2026 could be a big year for some mega IPOs that have been private for a while. There's talk about a SpaceX IPO, possibly, maybe some of the big AI labs, like some pretty massive companies that might be uh hitting the market soon.
Someone recently gave me a Facebook IPO help from JP Morgan when they worked on it. Like I'm very proud. I need to start wearing it around the office. Yeah.
But that
was like that was a mega IPO at the time and there was so much hype about it and then like technical difficulties and So many people eager to get in on that one.
It's so many funny people called that a flop, I guess, because the technical difficulties and it didn't do that great for a little bit. That would have been a great time to buy it.
Yeah. Seriously.
The interesting thing about the um market, or one of the interesting things about the market, is you have these companies that are gonna IPO when they're already gigantic. So like people point out that in earlier eras they might have IPO'd when they're like billion-dollar companies and now they're like octocorns or whatever. And then you have other companies that are also enormous, and there's no it's not clear that they're gonna IPO to at all. You know, I saw a headline about Stripe, perhaps. Perhaps raising more money. People been taught they could have probably IPO'd years ago. And one of the questions I have is are companies choosing not to IPO or put delaying IPO because the public market is not that fun, or because the private market has gotten so much richer, so much more liquid, et cetera, that that impulse to go public just isn't the same way as it might have been in a different generation.
So much more.
Yeah, this has kind of been a long running question in the market for a while now. But one thing I would just point out on the last point, it feels to me like companies in the private market, even though they're in the private market where presumably the pool of capital is smaller.
Yeah,
it feels like they're always fundraising. They're all this is the other thing. And this is the other thing
too. That like it used to be when I started covering tech companies as like your series A round and series B round C. Right. And now it just seems like this permanent round, especially with some of the AI companies. Always
fee raising.
Always raising. Anyway, we need to learn more about how giant companies are thinking about capital markets, both public and private.
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Chapters
8 chapters
1
Why are the biggest growth tech companies staying private instead of going public?
0:00–5:30
2
What does the $5 trillion private‑tech market cap represent compared to the S&P 500?
5:30–11:01
3
How have private‑market valuations grown 10× in the last decade?
11:01–17:20
4
What are SPVs and tender offers, and how do they give private‑company employees liquidity?
17:20–24:07
5
Why do founders prefer private capital over the public‑market IPO process?
24:07–30:05
6
How does a16z’s growth fund decide between early‑stage and later‑stage investments?
30:05–34:48
7
What impact will AI‑driven hyper‑growth have on the timing of future IPOs?
34:48–40:44
8
How will outcome‑based pricing reshape software business models and incumbents?
40:44–46:48
Speakers
3 identifiedMore from The a16z Show
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