The Shift from Public to Private Capital

By AJ Levine

Perspective & Analysis

February 25, 2025

Private markets have undergone a tremendous amount of structural change over the last several decades. 2024 brought these changes directly into the headlines. Select examples [1] include:

SpaceX Valuation Jumps to About $350 Billion in Insider Deal – Bloomberg
AI startup Databricks hits $62 billion valuation in record VC round – Reuters
OpenAI raises $6.6B and is now valued at $157B – TechCrunch

It is noteworthy that the $350 billion valuation of SpaceX is larger than the entire U.S. micro-cap market. Databricks’ $62 billion valuation would make it large enough to qualify for inclusion in the S&P 500 index. Nevertheless, their fundraising round was still oversubscribed. These striking capital commitments and valuations would almost certainly not have been possible even a decade ago.

This note builds on recent comments from Jared Weiner, Pathstone’s managing director of private markets: Private Markets – Changing Market Structure Benefits Scale. We provide an overview of the market evolution over the past few decades, and how we navigate these new dynamics in evaluating investment opportunities for our clients.

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If you have any questions or would like to discuss the key takeaways presented here, we encourage you to contact your advisor or click below.

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1. Companies cited for illustrative purposes only and do not constitute investment recommendations.

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This communication and its content are for informational and educational purposes only and should not be used as the basis for any investment decision. The information contained herein is based on publicly available sources believed to be reliable but is not a representation, expressed or implied, as to its accuracy, completeness or correctness. No information available through this communication is intended or should be construed as any advice, recommendation or endorsement from us as to any legal, tax, investment or other matters, nor shall be considered a solicitation or offer to buy or sell any security, future, option or other financial instrument or to offer or provide any investment advice or service to any person in any jurisdiction. Nothing contained in this communication constitutes investment advice or offers any opinion with respect to the suitability of any security, and this communication has no regard to the specific investment objectives, financial situation and particular needs of any specific recipient. Past performance is no guarantee of future results.

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Investing in private markets involves risks, including but not limited to, long lock-up periods during which you cannot redeem or get money out, high fees (private market investments often have higher management fees then public market investments), and less transparency (reduced regulation in private markets can result in less visibility into investment performance and fewer public filings).

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