Patient capital: The role of private markets in funding long-term economic growth
For more than a decade now, the traditional growth journey of a company, from seed-stage private funding through to an initial public offering (IPO), has been taking longer than it used to. A recent research piece from Vanguard, titled Why more growth happens before the IPO 1 highlighted that the average age of technology companies looking to secure a stock market listing has risen from around six years in the 1980s to 15 years by 2022. It never used to be like that. Amazon listed before turning three, Apple before turning five, and Google before turning six. For comparison, this year’s biggest IPO was for SpaceX, and took place 24 years after the company was founded. If OpenAI lists in 2027, the IPO will have occurred 11 years after it was founded, while an Anthropic listing next year would put it on a similar timeline to Google.
There are lots of good reasons for staying private for longer. Companies now have more ways to finance their expansion over extended periods through private equity, private credit and other forms of funding without having to seek a public listing to do so. But choosing to delay listing may also stem from concerns that regulation for listed companies, such as quarterly disclosure in the US, has become too burdensome. Perhaps firms feel they need to be far more robust now than they used to be before putting themselves up for public scrutiny.
Value accretion now happens before going public
Private companies are happy to stay private for longer, and in doing so, they are also scaling to higher valuations than ever before. In the US, for example, 87% of companies with revenue greater than $100 million are privately held.2 And, according to Vanguard: “The number of venture capital-backed companies worth $1 billion or more has skyrocketed, from just 228 companies worth a combined $800 billion in 2016 to roughly 1,700 companies worth $8.6 trillion—an almost 11-fold increase in value.” Effectively, innovation isn’t happening on the stock exchange any more. It’s arriving fully formed.
Public markets are getting smaller
At the same time, investors looking to own listed companies have far less to choose from than they used to. In the US, the number of publicly listed companies has roughly halved from around 8,000 in the late 1990s to around 4,000 in 2023.3 In the UK, there were roughly 3,300 listed companies in 2007; there are now just over 1,500. A similar effect has been evident across other regions.
The case for owning private markets
If you’re an investor seeking high-growth companies, at a time when investment growth through public companies is harder to come by, the argument for owning private assets through venture capital is worth listening to. UK start-ups raised £17.5 billion of venture capital across more than 2,000 deals in 2025, according to NatWest’s Future of UK Innovation report, produced in partnership with PitchBook.4 And the UK remains Europe’s largest venture capital market, attracting substantial international investment and reinforcing its position as a centre for innovation. The downside of this, also highlighted in the NatWest report, is that although we invest significantly in UK start-ups, international investors still represent more than 80% of the total capital deployed. It’s a validation of the attractiveness of our talent pool and our ecosystems, but it’s also a clear indicator that we should be doing more to keep that investment growth here.
Investing in UK start-up companies
British households, by and large, put substantial sums in cash savings, while investment fund ownership is more popular and widespread among US households. If we want to support the UK’s economic growth more broadly, we need to invest more in those private companies doing the lion’s share. Fortunately, the mechanisms to do so are already available. The UK has several investment vehicles offering exposure to private companies, most notably Venture Capital Trusts (VCTs). If you speak to founders, as we do regularly, almost all say how important VCT investment was for their earliest funding rounds. VCTs are often referred to as ‘patient capital’ because their structure offers long-term financing for innovative firms. It’s a testament to policymaking that more than 30 years ago we created something that continues to have such a profound positive effect on the UK economy.
Many exciting companies are choosing to stay private for longer as they grow. As public markets get smaller, investors may want to rethink where they search for growth too. Private does not mean inaccessible, and a VCT gives investors the opportunity to own a portfolio of private companies that are both well-placed achieve their ambitions and help give the UK economy a jump-start.
The new share offer for the Triple Point Venture VCT is now open. See here for more information.
Important information
This article is an advertisement for the purposes of the FCA’s Prospectus Rules: Admission to Trading on a Regulated Market sourcebook (PRM) and is not a prospectus. A prospectus in respect of the Offer has been published and is available on our website. Investors should read the prospectus before making any investment decision. Approval of the prospectus by the FCA should not be understood as an endorsement of the shares offered. Potential investors must only subscribe for or purchase shares based on information contained within it. The Triple Point Venture VCT invests in smaller companies, which can involve a higher degree of risk than investing in companies listed on an exchange. Investors’ capital is at risk and there is no guarantee that target returns will be achieved. Past performance and forecasts are not a reliable indicator of future performance. Tax treatment depends on the individual circumstances of each client and is subject to change. Tax reliefs depend on the VCT maintaining its qualifying status. Dividends are not guaranteed. This article has been approved by Triple Point Administration LLP, which is authorised and regulated by the Financial Conduct Authority.
2 https://www.apolloacademy.com/many-more-private-firms-in-the-us/
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