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Comment by Karrot_Kream | Hacker News Reader

Right but why would VCs want this? Wouldn't VCs value the liquidity of being able to flexibly enter and exit positions? I really wish there were a simple explanation of why companies don't want to IPO as early as they used to but there isn't. The closest I've found when talking to CEOs has been they don't want shareholders putting pressure on them for quarterly results and diluting the company's focus, especially when it's still growing and doesn't have a mature business.

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This mad dash to build companies worth TRILLIONS and with trillions of dollars in capex commitments based on the best of all possible worlds coming true for their products comes from this generation of CEOs. Nobody is saying “ok we’ve reached a new threshold in AI let’s see if we can expand slowly so it improves over the next 20 years”. They’re saying “we are on the verge of AGI and Superintelligence so we need hundreds and hundreds of billions of dollars to be spent to make it happen NOW”.

Then they'll turn around and say there's a decent chance ASI will kill us all, so better we build it before China does.

"Then they'll turn around and say there's a decent chance ASI will kill us all, so better we build it before China does."

And also set up moats so for security only they are allowed to push the state of the art forward.

Yeah that whole mass annihilation of humanity dollar. That’s a good dollar. Worth winning the rush to capture that one.

Paraphrasing Bill Hicks.

> Then they'll turn around and say there's a decent chance ASI will kill us all, so better we build it before China does.

So true. I know I'd rather be murdered by an American ASI than a Chinese one.

I think that's mostly so govt blocks their competition as much as possible

> Wouldn't VCs value the liquidity of being able to flexibly enter and exit positions?

Everyone's eager to get a slice of these pre-IPO companies, and the marginal utility of having it be more liquid on the public markets probably doesn't outweigh the legal requirements behind going public. It's not like VCs are stuck holding the bag until an IPO these days. I'm not sure why that changed, but it's probably not healthy.

> Everyone's eager to get a slice of these pre-IPO companies

I know plenty of companies that are failing on VC dime, whose investors can't sell their equity. I disagree that everyone wants a slice of these companies. It's not clear to me whether it's a net win for VCs to hold onto illiquid investments for so long (meaning I can see both the upsides and the downsides.)

"Right but why would VCs want this? Wouldn't VCs value the liquidity of being able to flexibly enter and exit positions? I really wish there were a simple explanation of why companies don't want to IPO as early as they used to but there isn't."

To me it's pretty clear. The earlier investors take out all the possible upside and then dump it on the retail market. The retail investor will be less and less able to buy stock that will grow 10x and more. It's hard to imagine SpaceX, OpenAI or Anthropic will multiply in value after the IPO. They are priced in a way that they have to execute perfectly for a long time to justify even their current price.

Just another step for the super wealthy to keep profits for themselves instead of letting the broader population to benefit.

Have we considered that many of them are rather dumb.

https://youtu.be/roe3SgezmmU

VCs just want returns on the money, and they don't need to use the stock market for that as much anymore.

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