Founders largely dislike Special Purpose Vehicles (SPVs) because they mask the true identity of investors on their capitalization table. This lack of transparency is seen as a risk, leading companies like Anduril to actively combat what they call "SPV hucksters."
Public market investors systematically underestimate sustained high growth (e.g., 60%+), defaulting to models that assume rapid deceleration. This creates an opportunity for private investors with longer time horizons to more accurately value these companies.
The private tech market has grown 10x in 10 years to a staggering $5 trillion valuation. This is nearly a quarter of the S&P 500's market cap, highlighting a massive shift of economic power away from public exchanges.
Private companies like SpaceX neutralize the talent-attraction power of public company RSUs by running regular, predictable tender offers. This provides employees with consistent liquidity, making private stock nearly as compelling as its public counterpart, but without the market volatility.
The current wave of AI companies is growing at unprecedented rates, far outpacing the growth curves of the mobile, social, or SaaS eras. They are becoming larger and more consequential much faster, a phenomenon described as "speed running the process of company growth."
At hyper-growth, mission-driven companies, employees may feel anxious about selling shares in a tender offer. The act can be perceived internally as a lack of faith in the company's ultimate long-term vision, creating social pressure to hold onto equity.
The biggest threat to incumbent software companies isn't a new feature, but a business model shift. AI enables outcome-based pricing, which massively favors agile newcomers as incumbents struggle to adapt their entire commercial structure away from seat-based subscriptions.
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.
Contrary to the belief that VCs exit at IPO, late-stage funds may act as public market investors. A16z became the largest buyer in its portfolio company Samsara's IPO, believing the public market undervalued it, signaling long-term conviction beyond the private-to-public transition.