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.

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.

A decade ago, 88% of a tech company's value was created post-IPO. For recent IPOs, 55% of the market cap creation happened while the company was still private, fundamentally changing where investors capture growth.

The venue for tech value creation has dramatically shifted from public to private markets. For recent IPOs, over half of their market cap was generated while private, a stark reversal from ten years prior when 88% of value was created post-IPO.

After years of consuming far more capital than it returned, the private market is rebalancing. The upcoming IPOs of a few major companies like SpaceX and Anthropic are projected to return more capital to investors than the entire ecosystem has in the past ten years combined, restoring health and liquidity to the venture landscape.

For founders considering an IPO, Max Levchin advises against worrying about a potential down-round from the last private valuation. The day-one price is irrelevant; the IPO is the beginning of a long public journey, and success is measured over 5-10 years.

For companies serving large governments and enterprises, being public acts as a crucial legitimizing event. It provides assurance that the company will be around long-term, which is critical for customers who become dependent on its services and data for core operations.

While media often highlights the costs of being public, the valuation multiple is an overlooked benefit. A consistently growing small business can command a 20x P/E ratio, far exceeding the typical 3x cash flow multiple offered in a private equity buyout.

Tesla's surprisingly low $1.7 billion IPO market cap, compared to its later trillion-dollar valuation, underscores the potential for venture-style conviction in public markets. It demonstrates how 1000x returns are possible for visionary firms that defy traditional metrics.