Marc Andreessen explains why.
Today, Andreessen is a prominent venture capitalist at the firm Andreessen Horowitz. I asked him to talk about how the stock market has changed over the last two decades. In the 1990s, it was common for small companies to have initial public offerings (IPOs), in which they offer their shares for sale to the general public. But today, companies wait a lot longer to hold their IPOs.
For example, Netscape went public when it was worth a little more than $2 billion, and this wasn't unusual. For comparison, Twitter waited until it was worth about $25 billion before it went public last year. Facebook was worth more than $100 billion when it had its IPO in 2012.
Many companies aren't going public at all. For example, Google bought the home automation company Nest earlier this year for $3.2 billion. Two decades ago, Nest would have been more likely to hold an IPO.
In this interview, conducted on June 12, Andreessen offers his thoughts on why companies are waiting longer to IPO. He argues that the shift is bad for ordinary investors, who no longer have the opportunity to invest in fast-growing technology firms. He also offers his thoughts on the work of Thomas Piketty, a French economist who has studied the growing gap between rich and poor.
