Launching and running a fund like an ETF involves two distinct and often conflicting skill sets. While many start as stock pickers who love research, a significant portion of their time is consumed by the business side: fundraising, investor relations, and compliance. Aspiring managers must be prepared for this dual role.

Howard Marks describes the downside of being a public company as receiving a constant, often arbitrary, 'report card' from the market. Daily stock price movements, driven by people with limited understanding of the company's long-term strategy, create noise and pressure that private companies can avoid.

The public markets offer a unique advantage over staying private indefinitely: discipline during transitions. Daily stock prices and investor scrutiny force management to confront hard truths and balance growth, profitability, and innovation. As seen with Netflix's pivot to streaming, this pressure is crucial for realigning employee incentives and making tough capital decisions during strategic shifts.

Contrary to the common CEO complaint, Steve Huffman finds the rigor and pressure of being a public company beneficial. He argues it imposes a healthy discipline that has made Reddit a better business, even though the process of going public was difficult.

Public company CEOs are caught between short-term investor pressure for profitability and the long-term strategic necessity of investing heavily in AI. The challenge is to manage capital allocation to satisfy quarterly expectations while simultaneously funding the fundamental R&D required to compete in the AI era.

The quarterly pressure of public markets creates a high-performance environment that is more engaging than the comfort of a private company. This constant feedback loop also helps attract talent by forcing the company to demonstrate consistent progress toward its long-term vision.

Beyond high compliance costs, companies are deterred from going public by the constant threat of "vexatious" class-action lawsuits following any stock dip and the weaponization of shareholder proposals, which makes managing annual general meetings a significant burden. These factors discourage the transition to public markets.

Despite private capital availability, the scrutiny of being a public company imposes healthy discipline. It forces better prioritization and maturity, which is ultimately beneficial for long-term growth and provides access to the world's deepest capital pools.

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.