As plain as the nose on your face
October 20, 2026 Leave a comment
I’m reprising a note written 4 years ago.
An extract from it is, “As a private company Uber raised $25 billion over 33 rounds while Google raised a paltry $36 million over 4 rounds.”
Once upon a time, companies became publicly listed much earlier in their corporate lives, allowing public market investors to participate in, and benefit from, a substantial portion of their growth and capital appreciation.
Over the past decade, however, this has changed considerably. Companies are remaining privately held for much longer, building enormous valuations under the fashionable label of “unicorns” before eventually coming to market.
The consequence is that much of the value creation is now being captured by a relatively small group of founders, insiders, venture capital firms and early-stage investors, rather than the broader investing public.
By the time these companies reach the stockmarket, much of the extraordinary capital appreciation has already occurred. In many instances, the IPO serves less as an opportunity for public investors to participate in the company’s next phase of growth and more as a liquidity event for those who got in years earlier.
Put another way, public market investors are increasingly being invited to provide the exit liquidity, rather than participate in the wealth creation.
Consider Uber, Airbnb, DoorDash, Pinterest and Coinbase, among others. Despite their enormous profiles, disruptive business models and, in some cases, extraordinary private-market valuations, their share price performances since listing have been mixed, with several delivering relatively ordinary returns compared with the wealth created before their IPOs.
Now, we are seeing a new wave of IPO’s from SpaceX, Anthropic, Stripe, Discord, Canva and OpenAI.
Feel free to also reference last month’s note titled, “Stockbrokers are not your mates”
I predict that by the end of the decade, there will be some sad and broken looking equity portfolios.
October 20, 2026
rob@karriasset.com.au
About Rob Zdravevski
