There are all sorts of reasons private tech companies with multi-billion-dollar valuations are putting off going public longer than they used to. The requirements of public reporting impose a big administrative burden on a company and eat a lot of its executives’ time. Staying private means less scrutiny and fewer stakeholders to answer to. It’s easier to pursue a long-term strategy when you don’t have to worry about quarterly performance.
But one big reason startups are staying private longer — and why big tech IPOs like the ones Square and Match are doing today are so rare — is that Wall Street just doesn’t think the most highly-valued tech startups are worth as much as they think they are.by