For late-stage private companies historically, an IPO was the most feasible path to liquidity. However, recent trends have clearly demonstrated a paradigm shift in how these historical “IPO Candidates” approach capital raising and shareholder liquidity. With IPO activity in 2025 falling short, many companies are extending their private lifecycle and relying on a maturing secondary market to satisfy stakeholders.

Investors who historically would look toward IPO allocations for access to the late-stage growth cohort are now more reliant on using private secondary liquidity sources to get access to some of the most sought-after sectors (like AI, Crypto and Compute Infrastructure). Since early 2025, the private market has experienced a surge in valuations among top-tier companies, with some gaining hundreds of billions in market capitalization. Increasingly, founders and early employees are utilizing secondary markets to realize liquidity for positions as more and more companies push IPO timelines further down the road. While IPOs showed modest recovery in early 2025, with 174 companies raising $31 billion, the lack of a $100 billion+ "clearinghouse" IPO during the year has signaled a tepid exit environment. Instead, companies are extending their private lifecycles due to:

  1. Access to Private Capital: Late-stage companies can raise billions privately without public market regulations
  2. IPO Volatility: Mixed post-IPO performance discourages smaller companies
  3. Secondary Market Growth: Private markets allow stakeholders to monetize equity through secondary sales

Sector Highlights

  • Artificial Intelligence: The focus of AI is shifting beyond leading names to downstream applications and adjacent sectors. Energy grids and specialized chips are critical as the AI demands rise
  • Crypto: After a quiet period, the cryptocurrency sector has re-emerged as a major driver of private market volume. Investor interest is shifting to infrastructure plays and established blockchain companies, offering diversification beyond tokens

Looking Ahead

  • 2022 Cohort Growth: Companies that were early stage (Series A and B) in 2022 are the new cohort of growth companies. While the sample size is smaller than 2021, these companies that have grown from early to mid-stage are engendering significant investor interest, especially from well-capitalized VCs
  • 2021 Survivors: Downturn-era companies that have weathered the storm of valuation contraction have made their way into their “steady state” growth profile. Some of these companies are quietly executing and their investor cohort is opportunistically adding by taking advantage of the re-pricing in these assets
  • AI Infrastructure: Firms solving AI energy and hardware bottlenecks remain strong investment targets

The private market is no longer just a precursor to IPOs; it’s a thriving, liquidity-rich environment with opportunities to invest in high-growth assets that stay private for years. Staying informed on these trends is essential for capturing value in this evolving market. For more information on related investment opportunities and insights, please listen to our William Blair Thinking Podcast, featuring our Head of Private Shares Trading, Tony Frascotti.