Late last year, a new world record shook the financial world:
A private startup raised $10 billion.
When most startups go out to raise capital, they raise a million or two. If they’re hot, they might raise five or ten million. A tiny handful raise $100+ million.
But $10 billion? That’s insane.
What’s happening here — and how can it help you make money?
Let’s take a look.
DataBricks Takes the Cake
The company I’m referring to is an AI startup. It’s called DataBricks.
In December 2024, it raised $10 billion — that’s a lot of cake — at a valuation of $62 billion.
That set a record for the biggest venture-capital funding round.
Now sure, DataBricks is a monster. It recently hit $3 billion in annualized revenue, and in Q3 2024, its quarter over quarter revenue jumped 60%.
But it really makes you wonder:
Why hasn’t a monster like this already gone public in a big, splashy IPO?
Why is it still private?
And how can investors like you profit from this craziness?
This Chart Says it All
To explain, let me start by showing you a mind-blowing chart.
As you can see below (compliments of venture firm Andreessen Horowitz), over the last twenty years or so, there’s been a shift in the type of investor that captures the largest returns.
For each company (Apple, Amazon, Facebook, etc.), the grey portion of each bar chart reflects the profits captured by public market investors…
And the orange portion shows the profits captured by private investors.
As you can see with even a quick glance, for years, public investors (in grey) reaped the lion’s share of a company’s returns.
For example, look at Microsoft (NASDAQ: MSFT).
When it went public in 1986, Microsoft’s market cap was about $777 million. And its early private investors could have cashed out for about 200x at the IPO. Not bad.
But after it went public, stock market investors made far more than that. As of April 1, 2025, they’ve made about 5,000x their money. That’s enough to turn $1,000 into $5 million.
Furthermore, prior to 2004, stock market investors also did well in companies like Apple, Oracle, and Amazon.
But look what’s been happening more recently:
Time and again, from Google to LinkedIn to Twitter, early private investors made hundreds of times their money — and meanwhile, public market investors made peanuts.
What’s going on here?
Private Market Profits
As it turns out, two recent trends are making it less attractive to invest in the stock market…
And far more desirable to invest in the private market.
Trend #1: Staying Private Longer – In the year 2000, the average amount of time between a company being founded and going IPO was 6 years. Today, that number is closer to 10 years.
Those four extra years allow a company to build its business — and its value — dramatically.
DataBricks is a great example. It’s twelve-year-old, still private, and already worth $62 billion.
In markets of old, DataBricks would have gone public years ago, back when its value was closer to $1 billion. And stock market investors could have profited handsomely.
But not in today’s world.
Nowadays, private investors are the ones capturing the upside from these monsters.
Trend #2: Raising Money Privately – Private companies today have less pressure to IPO. If they need growth capital, they can access it in the private market.
From hedge funds to mutual funds, the world’s most prominent investors are piling into the private markets. They recognize that most of a company’s value is being created before it gets to the stock market.
And thankfully, now that the laws have changed, regular investors like you can finally access the private markets, too.
Private Equity: Essential for Your Portfolio
Here’s the bottom line:
The stock market can’t provide you with the growth you’ve become accustomed to anymore.
By the time a company IPOs, private investors have already sucked out the biggest gains.
That’s why it’s essential that you have at least a small piece of your portfolio in private equity.
Happy Investing
P.S. As The Wall Street Journal reported yesterday, the startup OpenAI just raised a $40 billion funding round. That surpasses DataBricks’ funding round, and becomes the new world record. These massive private funding rounds are becoming the new normal. Don’t get left behind — stay tuned for various ways to get exposure to the private markets yourself!
Best Regards,
Founder
Crowdability.com
