Similar to the short-lived direct listing wave, the idea of staying private indefinitely will likely only apply to a handful of elite, capital-rich companies like SpaceX. The vast majority of successful startups will still follow the traditional IPO path to provide liquidity and access public markets.

The traditional IPO exit is being replaced by a perpetual secondary market for elite private companies. This new paradigm provides liquidity for investors and employees without the high costs and regulatory burdens of going public. This shift fundamentally alters the venture capital lifecycle, enabling longer private holding periods.

The default VC practice of distributing shares after an IPO lockup can leave massive gains on the table. Missing a multi-billion dollar run-up suggests a more nuanced, case-by-case discussion with LPs is needed, as holding can be the difference between a 5x and a 15x fund.

The standard VC practice of distributing shares to LPs immediately after a lockup expires can be a multi-billion dollar error. The case of selling Reddit at a $9B valuation, only to see it rise much higher, highlights that VCs may need to evolve into holding public positions longer, challenging the traditional model.

SpaceX is reportedly targeting a $1.5 trillion IPO to raise $30 billion. This capital isn't just for rockets but to fund a new AI infrastructure business: data centers in space. This represents a significant strategic shift, leveraging its launch dominance to compete in the AI compute market by acquiring massive quantities of GPUs.

The current IPO market is bifurcated. Investors are unenthusiastic about solid, VC-backed companies in the $5-$15B valuation range, leading to poor post-IPO performance. However, there is immense pent-up demand for a handful of mega-private companies like SpaceX and OpenAI.

For trillion-dollar private companies like SpaceX going public, the traditional 90-180 day lockup period is inadequate. The massive volume of insider shares hitting the market at once could crash the stock. Investment bankers are now designing staggered lockup releases to manage this unprecedented liquidity event.

Companies like SpaceX and OpenAI command massive private valuations partly because access to their shares is scarce. An IPO removes this barrier, making the stock universally available. This loss of scarcity value can lead to a valuation decline, a pattern seen in other assets like crypto when they became easily accessible via ETFs.

An IPO is not a final exit but the start of a public "marriage" with new responsibilities. This mindset shifts focus from the event itself to rigorously preparing the company for the long-term demands of public markets, for instance through simulated earnings calls and disciplined share allocation to long-term investors.