It exist, but not for poor peaople.

This is a little bit cheeky, but basically yeah.

Venture investment is limited to people who can demonstrably afford to take on the level of risk inherent to the market they're investing in. If you can't comfortably afford for the entirety of your venture investment to go to zero, you can't afford to invest in venture.

The exclusion criteria aren't perfect, (accredited investor designation is somewhat coarse-grained) but they're relatively reasonable.

A lot of people can afford investments to go to zero. Some are even accredited investors.

The problem is access. You can’t just go to some private market, and by the time you hear about a company it’s too late to get in.

If someone wants to invest in my company, why would I care whether they can afford to lose their investment or not?

No, I expect the reason it happens this way is because it's a lot easier and simpler to take massive amounts of cash from a few investors than solicit lots of tiny investments from the general public. That and being a PLC from the get go is probably more involved than being a private limited company.

I do think ideally all companies should be public from the get go, but probably wildly impractical right now.

It's called the Secondary Market

Because we - the plebs - are here to provide liquidity for the risk-takers. Hence whey they have to IPO.

But for what it is worth, for every successful AI company like Anthropic, OpenAI, etc. - there are probably tenfold more that are valued in the low billions, and will be the first ones to wash away / become worthless if/when the bubble pops.

And lastly, private sales do exist.

Increasingly these days, it seems if a VC backed company was profitable it would never IPO.

Why would they want to share profits?

In these companies, the shares *are* the product. Just like on social media *you* are the product, not the content.

> Why doesn't a private company stock market exist?

There is something almost ironic about you saying this on a site ran by Y combinator.

There have been billions and billions invested into Anthropic. It's very evidently possible. Just not for the general public.

> Why doesn’t a private company stock market exist?

Because then it would be a public stock market?

Before the 2012 JOBS Act, a US company generally had to register with the SEC if, at its fiscal year-end, it had:

* 500 or more shareholders

* More than $10 million in total assets.

Employees who owned shares counted toward that threshold, which made it particularly relevant to startups that paid employees partly in stock.

The requirement was to become a public *reporting* company, publishing financial statements and other SEC disclosures. It did not require an IPO or a stock-exchange listing, but it encouraged an IPO.

Thanks, Obama!

IIRC when you hit the threshold you got reporting requirements similar to if you were public, at which point why not just become public since the info's out there already and you can't be as secretive anymore?

Secondary Markets. There are exotic products in crypto ecosystem that can give you this exposure as well.

Because then it would just be the stock market.

The stock market used to be about companies raising capital from the public. But for the past few decades it's been about private shareholders of already profitable companies (e.g. Google) cashing out by selling to the general public.

There are many reasons, but the top of the list is Sarbanes Oxley. Regulation and the rise of secondary markets has made it such that retail investors no longer get access to companies during the higher risk, higher reward phases of company development. Apple (1980), Microsoft (1986), and Amazon (1997) went public with market values ranging from $440 million to $1.8 billion. Because they listed so early, public market investors were able to ride those companies up by 2,000x to 6,000x over the following decades

https://a16z.com/where-have-all-the-ipos-gone/ https://jhfinance.web.unc.edu/wp-content/uploads/sites/12369...

This is why I am very skeptical of complex regulation, because even if it is well intentioned, more complex regulation usually favors the rich and powerful. SOX was sold to the voting public as protecting them, which it did but at a very real cost. I became an accredited investor to get access to higher return, higher risk opportunities. It's a shame your typical 401k investor can't have 10% of their portfolio in higher risk assets like me.

> Apple (1980), Microsoft (1986), and Amazon (1997) went public with market values ranging from $440 million to $1.8 billion. Because they listed so early, public market investors were able to ride those companies up by 2,000x to 6,000x over the following decades

Nvidia (1999) was also in the same range and was almost 10'000x a couple of scandals ago.