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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.

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