Why have Anthropic, SpaceX, OpenAI stayed private for so long?

make its public debut right now, Kyle. Do you need an AI story? Do you have to have an AI narrative?

Uh, I would say yes. Everything that has gone out has been either AI, it has been some sort of space or defense company the past couple of years, or had some way to capture the AI story. You look at someone like Reddit is not an AI company, but their entire prospectus was about how their data is fueling the growth of these AI LLMs.

If you don't, you have to really find a way to capture investor interest and that's probably going to be through a significant uh turn toward profitability and a very good path to keep that going and seeing your margin start to increase.

Why are companies Kyle staying private for longer? You know, if if it was 10 years ago, you know, you think SpaceX and and OpenAI would already have made a public debut?

Yeah, probably, but I mean, there's no incentive for these companies to go public anymore. They don't they don't need to go public to get access to the capital markets that they they they're able to, right? If you're a data bricks or a stripe, you're not struggling for cash.

They also have had some sort of outlet for a lot of the early investors to get the liquidity they need. Secondary markets have been a huge growth for kind of that top 15, 20, top 30 companies.

Going public becomes a little more administrative burden. It's a cost. It is growth in the public eye and and kind of, you know, opening yourself up to uh some sort of activist activist investors.

That's just not needed right now. And so, I think the way the market has changed, the incentive is to stay public, or stay private.

The capital is there at the valuations that the companies want. There's no reason for these companies to go public now until you get to SpaceX and OpenAI and Anthropic's valuations. At some point there's a ceiling to the secondary market valuations, and I think those companies especially are starting to see that and their just enormous amount of capital they will need probably, you know, delineates a public market move more so than someone like a data bricks or someone like a stripe.

Let's say, Kyle, you have SpaceX, OpenAI and Anthropic, and they all go public over the next six to 12 months. I mean, these are mega IPOs, historic. I mean, can the public market swallow all that, Kyle?

I mean, yes, is the short answer, right? We know that, you know, there will be demand for those uh companies especially, no matter when they go public.

You think about how big the public markets are too, even though $3 trillion dollars or whatever their total valuation is going to be is enormous, that is still very, very small compared to what the entire market is and with the demand that these companies are are seeing, you will see rotation out of other companies if necessary to to get allocation.

What I think will be interesting though, is with the allocation going to those three companies, how much will actually be left for the rest? Obviously, if someone like Databricks or Stripe or Andril goes public, there will be demand for those shares, but if you are a a $3 billion dollar company with losses, that is not growing nearly as what you you want to be, will there be allocation for those companies? And the likelihood is probably not as much as they want.

And so I think when you look at these mega IPOs, the important aspect of what will happen when they go public is actually what happens with the rest of the companies. Are they able to get the liquidity they need or do they need to raise another private round and keep that uh valuation locked up in the private markets and distributions flat back to to LPs.