A key role of public equity markets is to help connect all investors with companies in order to provide capital necessary for those companies to grow, hire new workers, and fund research and development (R&D).\u00a0<\/p>\n
In return, as these companies grow, they provide returns that build wealth for U.S. households.\u00a0<\/p>\n
Intuitively, all these factors feed back into the economy and strengthen it. Making U.S. equity markets a cornerstone of the U.S. financial system, a contributor to our economic success as well as a source of financial security to U.S. households.\u00a0<\/p>\n
Today, we highlight some of the key data supporting Nasdaq\u2019s proposals to reinvigorate U.S. public equity markets.<\/p>\n
Private markets growing at the expense of public markets<\/strong><\/h2>\nThe balance between public and private markets has shifted significantly since 2000. Notably:\u00a0<\/p>\n
\n- The number of publicly listed companies in the U.S. has fallen by about 36%.<\/li>\n
- Private equity-backed companies (green line) have grown more than 475%.<\/li>\n<\/ul>\n
This shows that there is no lack of entrepreneurs or ideas in the U.S. \u2014 just that fewer new companies are choosing to go public.<\/p>\n
Chart 1: There are now 2.5x as many PE-backed companies as public companies<\/strong><\/p>\n\n\n\n![\"There](\"https:\/\/www.nasdaq.com\/sites\/acquia.prod\/files\/2025\/04\/24\/Screenshot%202025-04-24%20at%205.20.45%E2%80%AFPM.png\")
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Private companies are waiting longer and getting bigger<\/strong><\/h2>\nImportantly, these aren\u2019t just companies that are too small to go public.\u00a0<\/p>\n
There are over 1,400 unicorn<\/a> companies (with valuations at or above $1 billion) worth a combined $5.1 trillion<\/em> (chart below) \u2013 up from $330 billion a decade ago.\u00a0 Despite the growth of companies with a valuation of over $1 billion, research shows that only 26% are publicly listed. This includes companies that are worth tens of billions of dollars and even hundreds<\/em><\/a> of billions of dollars.<\/p>\nChart 2: More and more unicorn companies are privately held<\/strong><\/p>\n\n\n\n![\"More](\"https:\/\/www.nasdaq.com\/sites\/acquia.prod\/files\/2025\/04\/24\/Screenshot%202025-04-24%20at%205.24.32%E2%80%AFPM.png\")
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Public markets support household wealth, innovation and economic growth<\/strong><\/h2>\nTo be sure, private and public markets work together.\u00a0<\/p>\n
Private markets often provide greater flexibility that early-stage and high-growth companies need to scale, while public markets deliver a well-defined regulatory and liquidity framework that lowers the cost of capital and drives accountability beneficial to broader society.<\/p>\n
Still, there are challenges created by this trend of more companies staying private, as we highlight in Nasdaq\u2019s new white paper<\/a>:<\/p>\n\n- Household financial security<\/strong>: Retail investors miss out on the opportunity to invest in these companies as public companies. That makes it harder to secure the retirements of American investors, adding to the reliance on social security.<\/li>\n
- Employment growth:<\/strong> Research shows that companies that hold an initial public offering (IPO) see average annual employment growth of 23%<\/a> in their first three years post-IPO, compared to a 7% annual gain for companies that withdraw their IPO filing.<\/li>\n
- Innovation<\/strong>: Funds from IPOs support innovation via increased R&D spending, with research showing that public companies invest about 50% more<\/a> in R&D than comparable private firms.<\/li>\n
- Economic Growth<\/strong>: Other research shows that growing public markets also boosts economic growth.<\/a><\/li>\n<\/ul>\n
Chart 3: Private unicorns outperform broader public markets indexes<\/strong><\/p>\n\n\n\n![\"Private](\"https:\/\/www.nasdaq.com\/sites\/acquia.prod\/files\/2025\/04\/24\/Screenshot%202025-04-24%20at%205.26.13%E2%80%AFPM.png\")
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Economics is causing the shift<\/strong><\/h2>\nThe reason for this shift away from public markets is economics. Over time, new public company regulations have made being public more expensive and less attractive.<\/p>\n
That\u2019s led to companies waiting longer to go public, with the average age at time of IPO rising from 6.9 years a decade ago to 10.7 years<\/a> now.\u00a0<\/p>\nChart 4: Average age of a company at IPO<\/strong><\/p>\n\n\n\n![\"Average](\"https:\/\/www.nasdaq.com\/sites\/acquia.prod\/files\/2025\/04\/24\/Screenshot%202025-04-24%20at%205.28.51%E2%80%AFPM.png\")
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Meanwhile, other rule changes have made it easier and cheaper to access private markets. There\u2019s also been a trend of more companies choosing to remain private<\/a> or return to private ownership.<\/p>\nData shows that global private market AUM is up over 200% since 2013 to $14.5 trillion<\/em><\/a>. The increasing availability of private money has made it possible for these companies to stay private.<\/p>\nMaking public markets more attractive again<\/strong><\/h2>\nWith public markets playing a key role in economic growth, employment, R&D and household wealth, it\u2019s important to address the issues contributing to the decline of public markets.\u00a0<\/p>\n
This shows that there is no lack of entrepreneurs or ideas in the U.S. \u2014 just that fewer new companies are choosing to go public.<\/p>\n
Chart 1: There are now 2.5x as many PE-backed companies as public companies<\/strong><\/p>\n <\/source><\/source><\/source><\/picture>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n Importantly, these aren\u2019t just companies that are too small to go public.\u00a0<\/p>\n There are over 1,400 unicorn<\/a> companies (with valuations at or above $1 billion) worth a combined $5.1 trillion<\/em> (chart below) \u2013 up from $330 billion a decade ago.\u00a0 Despite the growth of companies with a valuation of over $1 billion, research shows that only 26% are publicly listed. This includes companies that are worth tens of billions of dollars and even hundreds<\/em><\/a> of billions of dollars.<\/p>\n Chart 2: More and more unicorn companies are privately held<\/strong><\/p>\n <\/source><\/source><\/source><\/picture>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n To be sure, private and public markets work together.\u00a0<\/p>\n Private markets often provide greater flexibility that early-stage and high-growth companies need to scale, while public markets deliver a well-defined regulatory and liquidity framework that lowers the cost of capital and drives accountability beneficial to broader society.<\/p>\n Still, there are challenges created by this trend of more companies staying private, as we highlight in Nasdaq\u2019s new white paper<\/a>:<\/p>\n Chart 3: Private unicorns outperform broader public markets indexes<\/strong><\/p>\n <\/source><\/source><\/source><\/picture>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n The reason for this shift away from public markets is economics. Over time, new public company regulations have made being public more expensive and less attractive.<\/p>\n That\u2019s led to companies waiting longer to go public, with the average age at time of IPO rising from 6.9 years a decade ago to 10.7 years<\/a> now.\u00a0<\/p>\n Chart 4: Average age of a company at IPO<\/strong><\/p>\n <\/source><\/source><\/source><\/picture>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n Meanwhile, other rule changes have made it easier and cheaper to access private markets. There\u2019s also been a trend of more companies choosing to remain private<\/a> or return to private ownership.<\/p>\n Data shows that global private market AUM is up over 200% since 2013 to $14.5 trillion<\/em><\/a>. The increasing availability of private money has made it possible for these companies to stay private.<\/p>\n With public markets playing a key role in economic growth, employment, R&D and household wealth, it\u2019s important to address the issues contributing to the decline of public markets.\u00a0<\/p>\n<\/p>\nPrivate companies are waiting longer and getting bigger<\/strong><\/h2>\n
<\/p>\nPublic markets support household wealth, innovation and economic growth<\/strong><\/h2>\n
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<\/p>\nEconomics is causing the shift<\/strong><\/h2>\n
<\/p>\nMaking public markets more attractive again<\/strong><\/h2>\n