Why More Good Companies Should Go Public Earlier

For most of modern capitalism there was a simple bargain. Companies created value, and the public that used their products could also own a piece of the upside. If you bought books on Amazon, you could buy Amazon. Your consumption and your ownership could point in the same direction.

That bargain is fraying.

Many of the most important companies now stay private through the steepest part of their growth. The value they create accrues to private funds long before a listing. When they finally consider the public markets, a large share of the compounding has already been captured. Everyday investors get what is left after insiders have harvested the curve.

The older pattern looked different. Microsoft went public in 1986. Amazon in 1997. Google in 2004. They were still volatile. They were still becoming themselves. Listing let ordinary investors join the journey early. Not as charity, but because the system assumed the public should share in the gains of the future it was paying for with its purchases and attention. That link between consumption and ownership gave public markets moral legitimacy.

The new pattern keeps the best companies private until late. Endless late stage rounds at rising valuations replace the price discovery and discipline of listing. By the time a company rings a bell, the easy narrative is gone and so is a lot of the upside. Public markets drift toward exit venues rather than places for building. If the strongest firms can raise everything privately, the set of companies that must list early skews weaker. That is how negative selection creeps in.

You can see the skew in how some firms choose to list. Special purpose acquisition companies were pitched as democratizing access, but they often brought lower quality deals to market at inflated prices. Sponsors got paid to close, not to perform. The public took the risk that private holders did not want. The latest headline makes the point. Chamath Palihapitiya announced a new blank check vehicle a few days ago, American Exceptionalism Acquisition A, targeting energy, AI, DeFi, and defense with a planned raise of 250 million dollars and no warrants. Whatever you think of the thesis, the structure again asks public investors to underwrite late stage risk while insiders keep the option value of selection and timing.

Why does this matter beyond returns. Because the legitimacy of the system depends on broad participation in the upside of progress. Customers fund value through usage and network effects. They should not be shut out of the wealth that value creates. A society where the public pays for breakthroughs but can only purchase the plateau breeds cynicism. You cannot ask people to believe in progress if the only way they touch its economics is through higher prices, subscription fees, or index funds that arrive after the story is written.

Going public is more than a financing tactic. It is a civic act. Listing opens the books and the cap table. It binds a company to standards of disclosure and accountability that match its footprint in people’s lives. The greatest businesses of the last generation embraced this not because it was convenient but because legitimacy matters when you become infrastructure.

There are reasons founders delay a listing. Public scrutiny is hard. Quarterly reporting can invite short term thinking. Legal overhead is real. In frothy private markets, it can feel irrational to step into price discipline when capital is abundant elsewhere. But the long view is simple. Durable companies survive sunlight. The transparency that founders fear often deepens trust with customers and recruits. It clarifies the mission for employees who want their work to compound into ownership the public can share.

If you are building infrastructure, the public should not be only your customer. They should be able to be your owners. Stripe’s merchants, Databricks’ data teams, OpenAI’s developers and end users form the demand power and the feedback loops that compound into dominance. If those communities cannot participate until the story is over, we have privatized the upside of network effects while socializing the dependency on them.

There is also a practical cost to lingering in private. Private rounds let narrative substitute for scrutiny. Mispricing can persist because the pool of price setters is small. Public markets are not perfectly efficient, but they are less fragile than a funding stack held up by a few large allocators. The discipline of being public usually improves operating cadence. Publish audited numbers. Face questions. Earn trust again and again. The market will punish over promising. It will also reward execution.

If the goal is to avoid a circus on day one, there are better tools than waiting a decade. Direct listings and auction style IPOs reduce the underpricing tax and spread allocations. Directed share programs can invite customers to participate at the offer. Regular secondary windows can give employees liquidity without turning the cap table into a revolving door. None of these are perfect, but they move us back toward the norm that progress should be shared more widely than a few funds.

We should restore the expectation that companies cross into the public markets while they are still becoming themselves. Not recklessly, and not before product market fit, but early enough that everyday investors can buy a real growth story rather than a mature annuity. Early enough that a customer who believes can also own.

OpenAI, Stripe, Databricks and their peers do not only sell software. They set the trajectory of entire industries. It is reasonable to ask them to share that trajectory with the public that makes it possible. If they do, we renew the bargain that made tech a shared project. If they do not, we drift toward a world where progress is financed by many and owned by few.