What's Happening?
Startups in the U.S. are increasingly choosing to remain private for extended periods, driven by the availability of alternative capital sources. According to recent data from Renaissance Capital, the median age of companies going public has increased to 13 years, up from 10 years in 2018. This trend is supported by a study from the University of Florida, which highlights that the average age of companies going public has more than doubled since 1980. The median revenue of companies at the time of their IPO has also increased significantly, from $16 million in 1980 to $218 million in 2024. The rise in alternative investments, such as private equity, venture capital, and private credit, is providing ample funding for startups, allowing them to mature longer before going public. The number of unicorns, or private companies valued over $1 billion, has surpassed 1,200 as of July 2025, with OpenAI leading as the most highly valued private company at $500 billion.
Why It's Important?
The trend of startups staying private longer has significant implications for the U.S. economy and the tech industry. By delaying public offerings, companies can avoid the regulatory burdens and short-term pressures associated with being publicly traded. This allows them to focus on long-term growth and innovation. The availability of alternative capital is reshaping the investment landscape, with private equity assets under management expected to double to $25 trillion over the next decade. This shift could lead to a more robust and mature tech sector, as companies have the resources to develop and scale before facing the scrutiny of public markets. However, it also means that retail investors may have fewer opportunities to invest in high-growth companies at an early stage.
What's Next?
As the trend of staying private longer continues, it is likely that more startups will seek alternative capital to fuel their growth. This could lead to increased competition among private equity firms and venture capitalists to invest in promising companies. Additionally, regulatory changes could be considered to make public markets more attractive to startups, potentially reducing the barriers and pressures associated with going public. Stakeholders, including policymakers and investors, will need to adapt to this evolving landscape to ensure that the benefits of innovation and growth are widely shared.
