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Has The “Private IPO” Become The New Normal?

The venture capital industry has been debating the trend towards the "private IPO" in recent quarters.

"Private IPOs" are becoming increasingly prevalent as the preferred financing route for mature start-ups. Tomasz Tunguz, a venture capitalist, shared some interesting data earlier this year that highlighted this trend, which took off during 2014.

For example, last year there were 211 rounds of growth financing (+$40 million) for startups across 251 working days. In comparison, there were only 15 venture-backed IPOs over the same period. Private market IPOs were 14x as common as public IPOs in 2014.

For full-year 2014, $65.1 billion was raised through "private IPOs" (private financing deals) while the dollar value of venture capital backed public offerings only amounted to $10.6 billion. During the first half of 2015, $38.8 billion was raised through "private IPOs" compared to $3.5 billion for public offerings.

These figures may suggest that the venture capital-backed public IPO market is struggling, but public IPO activity isn’t as...