Why more growth happens before the IPO

• Companies are staying private longer. Technology firms are delaying IPOs, resulting in more growth occurring in private markets. The median age of these companies at IPO has grown more than seven-fold, from around six years in the 1980s to a recent peak of 15 in 2022.
• The unicorn boom continues. The number of venture capital-backed companies worth $1 billion or more has skyrocketed, from just 228 companies worth a combined $800 billion in 2016 to roughly 1,700 companies worth $8.6 trillion—an almost 11-fold increase in value.
• Public small-cap investing is changing. The share of unprofitable companies in the Russell 2000 has more than doubled since the 1990s to roughly 40% today. Investors seeking profitable small- and mid-cap businesses may increasingly need to look beyond public markets.
• Secondary markets, IPOs, and AI-driven software opportunities are key themes to watch in the second half of 2026 that might benefit PE.
• Vanguard maintains a positive long-term view on private equity, forecasting a meaningful return premium for global buyout PE over global public equities.

As companies delay public listings and scale to larger valuations, private equity may offer investors earlier access to growth and potential return premiums relative to public markets.

For more details, read the paper: 2026 Private Equity Midyear Update: Private Longer, Public Later.