Mark:
I don't disagree with the gist of this. And what I wrote was not a moral judgement of any sort. It was simply a statement of opinion that IPOs today can't possibly be as lucrative as IPOs in the past. That's because all the early rounds of investment have been done privately and those investors will reap the vast majority of the reward. The public part of the investment is now much later and much less return remains to be had.

I don't think we are very far apart in how we look at this stuff.

I do think you underappreciate how much there is to make in the public market, how much more value is gained after the stocks go public than during the IPO.

Take Google for example. When Google went public in 2004, its market cap at EOY 2004 was $29 billion. I would say this caps what the pre-IPO investors made off Google at $29 billion.

Since then Google's market cap has risen to $3,789 billion. In addition, Google has bought back $337 billion of shares in the last 8 years. I think this means post IPO investors in Google have made $3,789+$337 - $29 = $4,097 billion, or 141 times as much as the VCs made in the pre-IPO phase of Google's life.

Is Google unique in having numbers like this? Well certainly not completely, probably not even a little. AAPL, NVDA, and a few other companies have all smashed through the $1,000 billion mark for post-IPO investors while very likely having only done at most tens-of-billions for the pre-IPO investors.

So I think the suggestion that the early investors "reap the vast majority of the reward." is precisely wrong, even overwhelmingly wrong.

I just did a quick check on NVDA and it returned at most $0.7 billion to its pre-IPO investors, while it has, to date, handed off more than 5,000 times that much in market value in its post-IPO life.

If I am being poly-anna-ish about this, I'd love to see the counter examples showing the VCs making bank while the rest of might should just get savings accounts.

Cheers,
R:)

I