Ventuals

Why Invest in Private Companies Before IPO?

The median company now stays private for 14 years. Here's why more value creation happens before IPO and what it means for investors.

By Emily Hsia·Updated

Rocket launch against green panels with upward price chart — symbolizing pre-IPO growth

The biggest investment returns of the past few decades have come from companies like Amazon, Google, and Meta. But the window in which ordinary investors could participate in that growth is shrinking. Companies are staying private for far longer than they used to, which means more of the value creation now happens before a company ever reaches the public market.

For investors who want exposure to the highest-growth phase of a company's life, that shift changes the math entirely.

Companies are staying private longer

Twenty years ago, the median tech company went public roughly five years after founding. Today that number is closer to 14 years. The reasons are straightforward: private capital is more abundant than ever, the regulatory costs of going public are high, and companies can raise billions without listing on an exchange.

The result is a massive private market. There are now roughly 1,300 private tech companies valued above $1 billion, representing about $4.7 trillion in aggregate value — approximately 15% of the entire Nasdaq market cap. Twenty years ago, that universe barely existed.

This is not a temporary blip. The infrastructure supporting private companies — from late-stage venture funds to secondary markets to employee liquidity programs — has matured to the point where staying private is now a viable long-term strategy, not just a phase before going public.

For investors, the implication is clear: if you only invest in public stocks, you are sitting out the period when many of the most valuable companies in the world are doing their fastest growing.

Most of the growth now happens before IPO

This is not just a theory. The data shows a measurable shift in where value creation occurs.

According to Andreessen Horowitz, companies that went public between 2014 and 2019 generated more than 80% of their total market capitalization after their IPO. Public investors captured most of the upside. But for more recent IPO cohorts, the pattern has reversed — over 50% of total market cap was created while the company was still private.

That means public-market investors who bought on IPO day are increasingly buying in after the fastest growth phase is already over.

Consider the numbers another way. In 1980, the median market value of a U.S. company at IPO was about $105 million in inflation-adjusted terms. By recent years, that figure had climbed to over $1 billion. Companies are not just waiting longer to go public — they are growing far larger before they do.

The practical consequence: the explosive, 10x-or-more growth that once happened in full view of public-market investors now increasingly happens behind closed doors, accessible mainly to venture capital firms, institutional investors, and insiders.

Amazon vs. OpenAI: what changed in 30 years

No comparison illustrates this shift more clearly than Amazon and OpenAI.

Amazon went public in May 1997 at a valuation of roughly $438 million. At the time, it was a three-year-old online bookstore with $148 million in annual revenue. Anyone with a brokerage account could buy shares on day one. An investor who bought $1,000 of Amazon stock at the IPO and held it would be sitting on well over $2 million today — a return of more than 2,000x.

That kind of return was available to the public because Amazon went public early, when it was still small.

OpenAI is a very different story. Founded in 2015, the company has stayed private for over a decade. In March 2026, it closed a $122 billion funding round at a valuation of $852 billion — making it one of the most valuable private companies in history. It is now targeting an IPO in late 2026 or early 2027, potentially at a valuation of $1 trillion or more.

By the time public investors can buy OpenAI shares on an exchange, the company will already be worth more than most of the S&P 500.

Amazon (1997 IPO)OpenAI (2026, pre-IPO)
Age at IPO3 years11+ years
IPO valuation~$438 millionTargeting $1T+
Revenue at IPO~$148 million~$13 billion (2025 annualized)
Pre-IPO accessMinimal — small VC rounds$122B raised privately across multiple rounds
Growth captured by public investorsNearly all of itA fraction of total value created

The difference is not about which company is "better." It is about when ordinary investors get access. Amazon's public shareholders got in on the ground floor. OpenAI's public shareholders will be buying into a company that has already compounded through its most explosive growth phase.

This pattern is not unique to OpenAI. SpaceX, valued at over $1.25 trillion as of early 2026, has followed a similar trajectory — staying private for over two decades while capturing enormous growth that public investors could not participate in through traditional channels.

What this means for investors

The shift toward longer private periods does not mean public-market investing is dead. It means that the highest-growth window for many of the most important companies is now in the private phase, and investors who want exposure to that window need to think beyond the stock exchange.

Historically, that was not an option for most people. Private-market investing was reserved for accredited investors, venture capital firms, and institutions. But the landscape is evolving. Today, there are several paths to getting exposure to private companies, depending on your investor status and goals — from secondary share purchases to equity crowdfunding to derivatives that offer price exposure without requiring direct share ownership.

For investors who are not accredited, newer structures like perpetual futures on platforms such as Ventuals can provide price exposure to private companies before IPO — no accreditation required, no transfer paperwork, and the ability to enter or exit at any time. These do not provide ownership or shareholder rights, but for many investors the goal is participating in the price movement, not holding a certificate.

The important thing is recognizing what has changed. The question is no longer just "should I invest in private companies?" It is whether you can afford to sit out the phase where the most valuable companies in the world are doing most of their growing.

The bottom line

The era when public investors captured most of a great company's growth is fading. Companies are staying private longer, raising more capital privately, and reaching enormous valuations before they ever list on an exchange. Amazon's 1997 IPO gave public investors a front-row seat to one of the greatest wealth-creation stories in history. OpenAI's upcoming IPO will give public investors a seat — but most of the show will already be over.

For investors who want exposure to the highest-growth phase of tomorrow's most important companies, the private market is where that growth is happening now.

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This article is for general informational purposes only and is not financial advice. It is not a recommendation or offer to buy, sell, or invest in any security, asset, or product. Always do your own research and consult qualified professional advisors before making investment decisions.

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