Three trends advisors need to know
by Jon Feinberg
Jon Feinberg is Managing Partner and Head of Distribution at ABS Global InvestmentsIn June, SpaceX went public at a $1.77 trillion valuation, the largest offering of any kind in history, raising $75 billion and pushing its market cap above $2 trillion in early trading. Weeks earlier, Cerebras, an AI chipmaker positioning itself as a direct challenger to Nvidia, completed a $6.4 billion IPO at a $40.6 billion valuation. With the “FOMO” created around these IPOs, your clients are probably asking how they can capture some of that value in the next big public offerings. The challenge is that by the time most investors can buy these companies, most of the value creation has already happened.1
Given that OpenAI and Anthropic have confidentially filed paperwork to go public with the SEC and are slated to be the next trillion-dollar IPOs, these questions from clients on IPO opportunities are only likely to accelerate. Anthropic is reportedly in discussions to list shares at a $2 to $3 trillion valuation, which would make it one of the most valuable companies in the world – but does that mean there’s alpha for your clients?2
As you talk to your clients about the opportunities around the IPO market, there are three trends you should keep in mind.
Companies Are Staying Private Longer
Because companies are staying private longer, more of their value creation now happens before they ever reach the public market. The average U.S. company now reaches the IPO market more than 11 years after founding, versus 7.3 years in the late 1990s (excluding Biotech). At the same time, the number of publicly listed U.S. companies has fallen roughly 50% from its peak while the number of venture- and private-equity-backed companies has increased 18-fold.3
More importantly, the private market is where many of the fastest-growing companies now spend most of their best-performing years. For example, among U.S. companies generating more than $100 million in annual revenue, 86% are private —six times the number of public companies.4
These scaled private companies also grow faster: the top 50 private venture-backed companies are growing revenue at roughly 150% per year, against about 21% for the top 50 public growth stocks, or 7x faster.5
The result is a market where some of the most compelling company and industry dynamics are happening before the public ever gets a chance to own them.
That growth doesn’t happen for free. Major valuation step-ups often occur in the final private rounds before an IPO, which is where most of the value is created. Anthropic raised $65 billion in the second quarter of 2026 at a $965 billion post-money valuation, a 2.37x step-up from its prior round just three months earlier, with rumors now circulating a late-2026 IPO between $2-$3 trillion.1 The move from $380 billion to $965 billion and now $2 trillion to $3 trillion occurred just two rounds before an IPO, with all the value creation going to private-market investors.
More companies are choosing to remain private for longer periods, simply because they can and have the necessary funding to do so. For advisors aiming to gain exposure to these private companies, it is crucial to build strong relationships. Ultimately, success in this area hinges on access. Understanding the late-stage market can help look beyond headline valuation and evaluate how an investment fits within the broader goals, risk tolerance, and existing portfolio.
Late-Stage Growth Equity Is Becoming More Accessible To Investors
The most obvious objection to private markets is illiquidity and risk, and for good reason. Venture capital has always been a high-risk asset class. Series A investing, also referred to as Early-Stage venture, carries failure rates between 65% and 75%, with liquidity horizons spanning a decade or more.
Late-stage growth equity presents a different risk and return profile. A company raising a Series D or later, often one to three years ahead of an IPO, has typically established market leadership, improved margins, and institutional backing. These companies would likely have been public 10 or 20 years ago, and failure rates in this cohort are closer to between 5% and 15%.
The return and liquidity objectives shift too. Rather than waiting a decade or more for a large multiple on your investment, the underwriting starts to look more like how a public equity investor would think about a position, with the potential to gain exposure during a company’s higher-growth years rather than after it enters the public market.
None of this was accessible to most investors until recently. Two developments changed that.
The first is the vehicles themselves. Historically, this exposure required accredited investor or qualified purchaser status, capital calls, subscription documents, K-1s, and a decade of patience. Registered funds can now offer that access.
For investors, the difference is meaningful. Instead of committing capital to a traditional private fund and waiting years for it to be called and eventually returned, a registered fund can provide access with daily pricing, 1099 reporting, more inclusive eligibility rules or standards, and periodic liquidity. More importantly, the capital can be invested immediately. You’re not sitting on a five-year commitment schedule waiting for a manager to call the money.
Late-stage private market exposure relies on a structured, multi-lens framework. Advisors should consider factors such as how close the company is to a liquidity event, its path to profitability, and which institutional investors are already involved.
Beyond evaluating the company itself, it’s important to also consider how late-stage growth exposure fits within a client’s portfolio. Liquidity needs, investment time horizon, allocation size, and existing exposure to growth companies can all factor into that decision. As new vehicles make the asset class easier to access, having a framework for evaluating both the underlying investment and its suitability for individual clients will become increasingly important.
The Private Secondary Market Is Maturing
The other development is the maturation of the secondary market. Transactions in private secondary shares grew from $26 billion in 2013 to $226 billion in 2025, a nearly ninefold increase. That matters for two reasons. First, it gives early investors and employees a way to access liquidity without waiting for an IPO. Second, it gives the market a way to price companies between primary funding rounds.
A mature secondary market means greater transaction volume, increased price discovery, additional liquidity, and more opportunities for investors to enter and exit positions before an IPO. However, compared to public markets, the secondary market remains less liquid and transparent.
That distinction is important when setting expectations with clients. Greater secondary-market activity can create additional avenues for liquidity, but advisors should ensure clients understand that liquidity is not guaranteed and that valuations and holding periods can differ from public-market investments. Setting those expectations upfront can help clients better understand both the opportunity and the tradeoffs of investing before an IPO.
The companies behind the biggest IPOs of 2027 and 2028 may already be known in the private markets, raising capital and trading through secondary transactions.
Increasingly, some of the best investment decisions are made one to three years before the IPO. Cerebras was $8 billion then. It listed two rounds later at $40.6 billion, a ~5x step-up.1 The rise of late-stage growth investing allows advisors the opportunity to participate in the coming wave of IPOs.
What The Next IPO Wave Means For Advisors
The return objective in late-stage growth equity is much different from traditional venture capital. There is a greater emphasis on internal rate of return over a one- to three-year holding period rather than maximizing the multiple on invested capital over a 10-year horizon.
Investing in scaled private companies ahead of a liquidity event can offer attractive upside while meaningfully reducing some of the risks associated with traditional venture capital. Growing institutional demand for private company shares is also creating more avenues for investors to realize value.
The takeaway for advisors is that IPO investing increasingly begins well before a company reaches the public market. As access to late-stage private companies expands, understanding how and where value is created before an IPO will become an increasingly important part of evaluating the opportunity.
As you connect with your clients at the end of the year, looking beyond the IPO calendar and beginning the evaluation process earlier is the key. The next wave of IPOs may be happening on the public exchanges, but the opportunity to evaluate them starts well before they get there.
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