Private for Longer
The structural trend supporting growth equity
The number of publicly listed companies has been declining in the US since 1996. One reason is that smaller firms are trying to grow rapidly to capture market share and customers before listing. This delay in going public can result in higher long-term valuations. To achieve rapid growth, these smaller firms are turning more often to mega-rounds of private financing (over $100m).
This is where growth equity funds step in. Growth investments typically participate in later stage venture rounds, in the sweet spot between venture phase and fully mature firms. Over the past few years, investors have been very receptive towards these types of growth equity investments.