Hot tech startups are increasingly using private markets as de facto public markets, raising large sums from institutional investors without selling shares to the general public.
That shift is driven by disclosure rules: public offerings require audited financials and updates on material events, while companies staying private can avoid much of that reporting burden.
In the 1930s, those rules helped channel capital into public markets because ordinary investors held most of the money and growing companies needed broad access to it.
In the 2020s, deep pools of institutional capital let startups scale without an IPO, weakening the traditional link between raising major funding and becoming a public company.
Is an AI-driven IPO boom about to end the era of mega-companies staying private?
Are retail investors being locked out of wealth as top companies shun public markets?
Why are risky private funds being pushed into 401(k)s as public markets are declared broken?