About 85% of venture capital returns come from just a few dozen companies. As private firms like SpaceX and Instacart grow large enough to go public, investors start comparing them to existing public companies to decide if an IPO makes sense.
When you're thinking about venture, something like 85% of the returns of the overall venture investing industry are concentrated in just a couple of dozen of private companies. When you start to become a company that's as big as, say, a SpaceX or an Instacart, as a simple example, when you're that big, you are knocking on the door of IPOing. And so investors in those businesses start to think about those businesses in the context of publicly traded competitive companies.
