US companies are opting to go public much later than they did in the past, which is having a major impact on investing trends.
Early stage or seed VC funding is seeing volumes shrink, meaning important initial investments are more difficult for new companies. In the past, going public was the best way to raise capital, access new funding, and develop businesses. But today, the US has"abnormally few listed firms,"In 1975 there were 22 public firms for every million Americans. Now that number is just 11,The dearth of investment options is stark for a number of reasons, among them that a lack of choice is shrinking the available market for average investors.
The impending mega IPO for Lyft is a case in point. The company is valued at $23 billion, a sum so vast that it implies that much of its growth has already been captured by private investors and VCs who got in early, rather than the public to whom the company will now be sold.
Well, IPOs can have unintended consequences, some of which cannot be reversed.
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