🤝 This week’s edition is sponsored by Byldd

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📰 Today's topic: Why the best companies are staying private (and what it means for investors)

Here's a fact that woke me up: Databricks recently crossed $4B in annual recurring revenue (ARR) and is still private.

This company is an investor’s dream - revenue growing 50% YoY, positive free cash flow, and 650+ customers paying over $1M annually.

In comparison, Facebook (Meta) IPO'd in 2012 with $3.7B in annual revenue. Today, the company is worth just under $2T.

Think about that. Databricks has more revenue than Facebook did when it went public, yet the public markets can't touch it.

The growing pattern

Look no further than the titans in the payments sector, and you’ll find this isn't a one-off.

• Stripe (private): $106B valuation; processed $1.4T in payments last year with 38% growth.

• PayPal (public): $70B market cap; processed $1.68T with 10% growth.

Stripe is growing nearly 6x faster than PayPal, yet public market investors can only buy the latter.

This, is what I call the ‘Private Market Premium’ in action. The best companies are capturing their explosive growth phases away from public markets.

And by the time they IPO? You're buying mature companies at mature valuations.

What changed?

The median age of companies at IPO increased from 7 years a decade ago to 11 years in 2025.

But this isn’t just about age; it's about scale.

While companies used to go public at $100-200M in annual revenue, they’re now staying private until they hit billions.

3 reasons for the shift

1. Oceans of dry powder: Global PE and VC funds were holding on to $2.6T in uncommitted capital in 2024. Companies can now raise hundreds of millions privately without the IPO hassle.

2. IPO market volatility: With inflation uncertainty and trade policy shifts, many companies have been pausing plans to enter public markets. Why deal with quarterly earnings calls when private investors will cut the check?

3. Regulatory burden: Being public means constant scrutiny. Private companies increasingly want to focus on long-term execution instead of managing Wall Street expectations.

What this means for you

Unlike when the ‘Magnificent 7’ went public - if you're serious about building wealth, you can't ignore private markets for much longer.

Because when companies are capturing their most significant growth before they ever trade publicly, sitting on the sidelines means leaving massive opportunities on the table.

But, the good news for retail investors: the options to get involved are more available than ever. Angel investing, secondary markets, venture funds, syndicates - the list goes on.

Bottom line

Don’t get me wrong; this isn't about abandoning public stocks. Indexes like the S&P 500 are still foundational.

Instead, take it as a nudge: you might be playing yesterday's game if your strategy is waiting for the next Facebook to IPO.

– Brian from Angel Squad

The NY tech scene is on fire. And it pains me to say it as a West-Coaster…but this whole ‘Silicon Alley’ thing has a ring to it.

The growth of our Angel Squad community there has followed suit. We have nearly 300 Squad members in the big apple, and it’s arguably our most active hub.

The next quarterly meetup in NYC is happening on October 29. If you’re in the area, you’re invited to claim a 30-day guest pass to Angel Squad and join us.

🤙 Meet the crew →

Overheard in SF…probably

“We're hiring a Chief Happiness Officer before we hire a CFO. Spreadsheets can't measure the joy we bring to the world.”