The biggest risk for a late-stage private company is a growth slowdown. This forces a valuation model shift from a high multiple on future growth to a much lower multiple on current cash flow—a painful transition when you can't exit to the public markets.

Ultra-late-stage companies like Ramp and Stripe represent a new category: "private as public." They could be public but choose not to be. Investors should expect returns similar to mid-cap public stocks (e.g., 30-40% YoY), not the 2-3x multiples of traditional venture rounds. The asset class is different, so the return profile must be too.

Public serial acquirers like Constellation Software exploit a valuation arbitrage. They buy private niche businesses at low multiples (e.g., 5x EBITDA) which are then automatically revalued at the parent company's much higher public market multiple (e.g., 28x EBITDA), creating significant shareholder value on day one.

In the current AI boom, companies are raising subsequent funding rounds at the same high revenue multiples as previous ones, months apart. This is because growth rates aren't decelerating as expected, challenging the wisdom that valuation multiples must compress as revenue scales.

The greatest systemic threat from the booming private credit market isn't excessive leverage but its heavy concentration in technology companies. A significant drop in tech enterprise value multiples could trigger a widespread event, as tech constitutes roughly half of private credit portfolios.

Valuations don't jump dramatically; they 'sneak up on you.' An investor might balk at a $45M cap when they expected $40M. But the fear of missing a potential unicorn is stronger than the desire for a slightly better price, causing a gradual, batch-over-batch inflation of valuation norms.

The standard VC heuristic—that each investment must potentially return the entire fund—is strained by hyper-valuations. For a company raising at ~$200M, a typical fund needs a 60x return, meaning a $12 billion exit is the minimum for the investment to be a success, not a grand slam.

The trend of companies staying private longer and raising huge late-stage rounds isn't just about VC exuberance. It's a direct consequence of a series of regulations (like Sarbanes-Oxley) that made going public extremely costly and onerous. As a result, the private capital markets evolved to fill the gap, fundamentally changing venture capital.

Relying on the once-golden 'T2D3' growth metric for SaaS companies is now terrible advice for 2025. The market has shifted, and founders with these strong historical metrics are still struggling to get funded, indicating that even elite growth is no longer a guarantee of investment.