Goldman Chief Says Private Markets Trump Public Listings, FT Reports

What's Happening: The Financial Times reports Goldman Sachs CEO David Solomon is advising startups to think twice before going public, citing the robust availability of private capital as a viable alternative to IPOs.

Why It Matters:

• Shift: This represents a significant pivot from traditional Wall Street thinking that successful companies must eventually go public

• Market Evolution: The trend signals a fundamental restructuring of how large companies access capital and provide liquidity to stakeholders

• Industry Impact: This could further reduce the already shrinking pool of public companies, affecting market transparency and retail investor access

The Key Moves:

• Private Funding: Major startups like Stripe, OpenAI, and SpaceX are choosing to stay private despite massive valuations

• Secondary Markets: Companies are creating new channels for employee liquidity without going public

• Bank Adaptation: Goldman Sachs is pivoting to serve large private companies, as evidenced by their $6.5B Stripe deal in 2023

By The Numbers:

• Engineering Focus: Goldman now employs 11,000 engineers out of 46,000 total employees

• AI Efficiency: Solomon claims AI can complete 95% of IPO registration documents in minutes, versus two weeks for a six-person team

• Team Scale: Traditional IPO document preparation previously required six people working for two weeks

Key Players:

• David Solomon: Goldman Sachs CEO advocating for cautious approach to public listings

• Josh Kushner: Leader of Thrive Capital, representing the new wave of mega-scale venture capital

• Stripe: Major payments company exemplifying the trend by raising private capital instead of pursuing IPO

Key Quotes:

• Market Reality: "Today you can get capital privately, at scale... you can also get liquidity in the private markets" - Solomon

• Public Scrutiny: "It's not fun being a public company. Who would want to be a public company?" - Solomon

The Wrap: This stance from one of Wall Street's most influential voices suggests a permanent shift in how companies approach growth and capital raising, potentially reshaping the boundary between public and private markets for decades to come.