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Comment by GenerWork | Hacker News Reader

As someone who knows admittedly knows nothing about startup funding rounds, how many more rounds of funding can they do before an IPO? Is it effectively infinite?

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Effectively infinite. Databricks is a good example. They're still private after 13 years and closed a Series L round last year. Stripe is similar.

Having been through an IPO before, it was good for employee liquidity, but bad for the culture and long-term success of the company.

Dead capital. There's no need for public funding until they are reasy to cash out at the top, if ever.

How do investors cash out? Do they sell to new round investors?

Correct. There is also a secondary market.

Going off the other reply, I wonder if a highly-active secondary market means that companies can raise series [A-Z]+ rounds effectively forever, where each "round" just refers to a giant purchase of shares under strict company supervision. Is this the new game for startups?

If investor pool becomes too loose the company becomes de facto public, subject to all SEC-enforced regulations.

The judgment is subjective though, so pushing the boundaries could be a calculated risk.

> There's no need for public funding

You're assuming private liquidity to be infinite and private credit (that fuels VCs) to always have favorable rates.

When you have companies like SpaceX and Anthropic raising billions, it is hard to believe that private credit isn't virtually infinite.

so how do stripe employees get liquidity? can anyone sell their secondary shares?

Stripe might buy back the shares at a good price. They might be able to sell on secondary markets.

Tender offers.

https://www.investor.gov/introduction-investing/investing-ba...

https://www.law.cornell.edu/wex/tender_offer

https://carta.com/learn/equity/liquidity-events/tender-offer...

https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...

(secondary markets are sometimes an option, depending on stock transfer restrictions)

I can't speak for the specific case of Stripe, but it's fairly common for private companies to have a "tender offer" in which employees have the opportunity to sell some portion of their equity. This is often done in conjunction with a new investment round.

Outside of big tech, it's also fairly common for private companies to simply not offer equity to employees.

Private/secondary markets.

Bankruptcy court?

FTX bought 8% of Anthropic for $500m in 2021.

https://www.forbes.com/sites/josipamajic/2026/03/18/ftx-owne...

regular tender offers

There's a newish term for this: RLO, Recurring Liquidity Opportunity. These are tender offers at some recurring interval. Even some companies that have a shorter lifespan (say 7 years) offer this.

Company I worked for had a deal where I could sell back to the company at any time.

The price was determined by a formula based on revenue and such, so I always knew what they were worth.

I was not allowed to sell to anyone else though.

I believe the canonical example is Databricks on round L

I believe Databricks series L round raised $4B in late 2025, but earlier this year they raised another $5B so technically they've maybe completed series M round and are "on" series N round now? The press releases are a bit confusing to me.

It's semantics, but the latest raise might have been a follow-on to Series M, not a new round (to be clear, I know nothing about their finances, just speaking from experience at another company).

What happens when you make it to Z do they then start doing Z1 rounds or does it reset to AA like excel (though that would be confusing)? Hex?

The AA scheme has already been used for "down round", so they might have to get creative.

I imagine there are ways for existing investors to achieve liquidity while still raising venture funding. But an IPO is "the" liquidity event and I imagine there will be pressure from investors for that.

I also imagine that venture funding rounds have a lower ceiling than the public markets - but at these rounds I'm not so sure!

Once they reach series Z does it go back to A or do we get a new format like AA, AB ?

We live in Unicode times. We switch to Greek alphabets.

α β γ δ ε ζ η θ ι κ λ μ ν ξ ο π ρ σ τ υ φ χ ψ ω

After those are used up, it moves to Devanagari, Hangul, Katakana, Hiragana, and then Kanji.

Depends on the investors if they see growth. The downside is dilution. Preferably they just want the Series I as the IPO in this case.

They cannot raise forever, SpaceX has done more rounds but the timing is most important.

usually you would go through seed funding, the series a,b, and possibly a1 and b1. If you entered c or d territory it meant that you still had a chance but vc would be following you very closely. After d, you could raise money, but it would be under very unfavorable conditions

The number of rounds is irrelevant. Having crunched the data, what is relevant to terms is simply as you'd expect the rate of growth. The only reason it rarely happens with fast growing companies is that the liquidity of an IPO is attractive. As a result, companies doing many rounds are disproportionately companies that are performing too poorly to try and IPO.

Yes, whatever you like

they can do as many as they want. but at some point investors need/want to exit their positions and push for an IPO. That point is different for every company.

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