Contrary to the prevailing wisdom of staying private as long as possible, VC Keith Rabois counsels his portfolio companies to pursue an IPO once they hit ~$50 million in predictable revenue. He believes the benefits of being public outweigh the costs much earlier than most founders think.

While a $3-5 billion exit is an incredible achievement, the ambition in top-tier venture capital has scaled up. With tech giants valued in the trillions, VCs now underwrite investments with the potential for trillion-dollar outcomes, recalibrating what qualifies as a "sufficient" return.

Top-tier private companies like Stripe and Databricks are actively choosing to delay IPOs, viewing the public market as an inferior "product." With access to cheaper private capital and freedom from quarterly scrutiny and activist investors, staying private offers a better environment to build long-term value.

EquipmentShare's IPO was "effortless" because it checked all the boxes for the current market: billions in revenue, high growth at that scale (47%), and profitability. This success contrasts sharply with the struggles of smaller tech companies, defining the new standard for a smooth IPO.

With Series A valuations around $75M, a $1B exit fails to deliver venture-scale returns after dilution. Investors now require a credible path to a $10B+ 'decacorn' outcome, forcing founders to pitch stories of reaching half a billion to a billion in ARR to be considered.

The decision to go public is now driven less by a need for currency or liquidity and more by massive capital requirements, like for AI build-outs, that private markets can no longer satisfy. Solomon notes the current regulatory and market structure makes it unattractive for companies to go public until it's an absolute necessity.

For high-growth companies, reaching a $100M ARR milestone no longer automatically triggers IPO plans. With abundant private capital, many founders now see going public as an unnecessary burden, preferring to avoid SEC reporting and gain liquidity through private growth rounds.

Counterintuitively, the compliance burden for an IPO increases dramatically with revenue. Companies over $1B face rigorous PCOB compliance, requiring years of building out teams and processes, unlike pre-revenue firms that can go public more simply.

The abundance of private capital means the most successful companies no longer need to go public for growth funding. This disrupts the traditional VC model, where IPOs are a primary exit path, forcing firms to re-evaluate how and when they achieve liquidity for their limited partners, even for their best assets.