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The decision to delay an IPO, often framed as waiting for better market conditions, is historically a negative signal. The majority of these companies are acquired at a lower valuation or fail to execute their business model against new competition or evaporating demand, ultimately never reaching the public markets.
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Scott Galloway argues that OpenAI's highly anticipated IPO is unlikely to happen. The company's momentum has turned negative, major partnerships are fraying, and its high private valuation creates a 'veto block' from late-stage investors unwilling to accept a lower public price.
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.
Companies like Stripe are avoiding IPOs because the private markets now solve the two main historical drivers: access to capital and employee liquidity. With annual secondary tenders and vast private funding available, the traditional benefits of going public are no longer compelling for many late-stage startups.
Extreme volatility in public tech stocks, where market caps can swing wildly disconnected from performance, incentivizes successful late-stage companies like Canva and Stripe to delay IPOs. This directly worsens the VC industry's liquidity crisis by trapping capital for longer.
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.
Smart ring maker Aura delayed its IPO despite being 4.4x oversubscribed, a historically strong figure. This signals that modern tech IPOs for premier companies now benchmark against 10-15x oversubscription rates. The move also highlights the use of IPOs for marketing rather than capital, making them easier to postpone if valuation expectations aren't met.
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.
The postponement of Oura's IPO is not company-specific but reflects broader market volatility from rising interest rates. This macroeconomic headwind poses a major risk for Anthropic's anticipated IPO and could dampen investor confidence across the entire AI sector.
The trend of keeping startups private longer means a company founded 10 years ago, like Airtable, can become technologically obsolete before it exits. The underlying platform shift (e.g., from no-code to generative AI) can strand even successful companies.
The publicly cited reason for OpenAI delaying its IPO until 2027 is market volatility. However, the host speculates the true cause is unsustainable spending and slowing growth, forcing the company to undertake a significant cost-reduction effort before it can face public market scrutiny.
