It’s certainly seems true that companies are able to survive on private funding longer than they were a decade or two ago. The longer the company stays private, the larger the IPO leads to bigger payouts for investors and employees that stick around long enough to see the liquidity event and/or have enough cash to exercise their options should they choose to leave. With a strong team, perhaps the lack of public shareholders leads them to pursue more moonshots, shut down fewer products, and find more success but I also think there are downsides.
Chief among them, I think, is that employees generally assume the downside of additional private funding as VCs often get to maintain their pro-rata rights (get to maintain their ownership percentage) while employees get diluted with additional funding. As private valuations rise, option strike prices increase without any guarantee of liquidity in the future. That means employees either need to stick around longer or need to pay significantly higher strike prices for their options without a guarantee they will be worth anything in the future. RSUs (basically options with a $0 strike price) are very employee friendly and many engineers seek them out as they are as good as cash.
As with many things it’s probably a trade off. Perhaps they stay more “true” to the mission without going public, but I would guess many google employees would have missed the wealth brought about by the liquidity from the IPO.
Good question. What do you think?