Over the past two decades, a disturbing trend has emerged in the tech world. The fastest-growing startup companies are staying private longer than ever before.
According to research by Scott Ritter, who studies public markets as a Professor at the University of Florida, the average age of a tech company at IPO in 1999 was just four years. By 2014, the average age of tech companies going public had reached 11 years.
Companies are going public today as much larger, more mature companies. Venture capitalists and other private investors fund huge private investments into companies that could certainly go public if they wanted to. This delays the need for many companies to IPO. The result is that these private investors scoop up gains that used to go to public markets.