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From Private to Public: Unlocking the Power of Capital Markets
Tracing the roots of private markets and exploring why public markets offer unparalleled growth opportunities.
Dec 9, 2024 | Jason Bennick
"There are a whole bunch of great companies that are owned privately that do want to make their way into the public markets."
- Ted Pick, CEO of Morgan Stanley
Investopedia Report by David Marino-Nachison​
Published October 16, 2024
Ted Pick, CEO of Morgan Stanley, said recently that he expected to see more initial public offerings from big companies. Pick’s comments came as Morgan Stanley reported third-quarter investment banking revenues that rose more than 50% year-over-year. The IPO market has been cool lately but Goldman Sachs CEO David Solomon said recently Goldman has lately seen “an acceleration of activity." In this article, we explore the roots of private capital markets and why public capital markets unlock limitless opportunities.
The Roots of Private Capital Markets
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Private capital markets have played a critical role in U.S. economic development, offering businesses an alternative to public exchanges for raising funds. Their origins lie in informal networks of capital pooling, evolving over centuries to include sophisticated structures like private equity and venture capital.
However, while private capital markets have their advantages, there’s a compelling case for companies to look toward public capital markets for near-unlimited growth potential.​​
A Quick Look Back​
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The story of private capital markets begins long before regulation. In the 18th and 19th centuries, private investors bankrolled industries like maritime trade and railroads, often through handshake agreements or informal partnerships.
Later, limited partnerships gained traction, allowing groups of wealthy individuals to fund major projects without the complexities of public markets.
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This informal system became more defined with the passage of the Securities Act of 1933 and the Securities Exchange Act of 1934, which carved out a regulatory space for private placements under exemptions like Regulation D.
By the 1980s, private capital markets had come into their own. Venture capitalists and private equity firms emerged as key players, fueling some of the most innovative industries we see today.
What Makes Private Capital Markets Work​
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Private capital markets operate on principles that give them a unique edge for certain types of companies:
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Privacy: No need to open the books to the world.
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Flexibility: Terms are customized—each deal is a tailored fit.
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Accredited Investors: With a smaller, more sophisticated pool of investors, deals focus on quality over quantity.
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Relationships: Trust is everything, and deals often come down to who you know.
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Long-Term Vision: With less emphasis on quarterly performance, companies can focus on building real, sustainable value.​
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While this sounds ideal, the trade-off is limited scalability. Private markets, by design, exclude a broader investor base, which restricts capital access.
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Why Public Markets Are Worth the Jump
For private companies looking to scale, public capital markets offer something private markets can’t: vast and nearly unlimited access to capital.
Once a company goes public, it taps into the broader financial ecosystem of institutional and retail investors. Liquidity soars, secondary offerings open doors for future funding, and the company benefits from enhanced visibility and credibility.
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Yes, the regulatory requirements are higher, and IPOs aren’t cost-effective for every company, however the payoff can be massively transformative. The discipline instilled by transparency and governance isn’t just a compliance checkbox—it’s often a catalyst for operational excellence.
Companies that are prepared for the leap typically find the rewards far outweigh the costs.
Private capital markets have been the backbone of entrepreneurial finance for centuries. They’ve fostered innovation and given rise to some of the world’s most transformative companies.
Yet for businesses ready to scale and take on the world, public capital markets offer something private markets can’t: the ability to grow without limits.
Public markets aren’t just a step forward—they’re a leap into a broader, more dynamic world of capital.
Companies that embrace the challenge often find the transition is the key to unlocking their full potential.
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If you are a private company seeking to reach exponential heights of future growth, visit our Blue Chip Program™ to explore your qualifications for an IPO.
Sources:
Securities Act of 1933, 15 U.S.C. § 77a et seq.
Securities Exchange Act of 1934, 15 U.S.C. § 78a et seq.
National Venture Capital Association (NVCA), "The Evolution of Venture Capital" (2023)
U.S. Securities and Exchange Commission, "Regulation D Offerings: A Guide for Companies" (2022)
PwC, "The Costs and Benefits of Going Public in the U.S." (2022)