[kludgekraft]

Late stage VC and PE went after sky-high valuations, startups didn't see the need to go IPO for much longer than the yesteryears. At some point, they run out of money and IPO is their only option to raise afresh. VC/PE must correct this by bringing their valuations inline with the IPO market and be just a stepping stone and not the ultimate step in the fundraising market

[bradleyjg]

That rather depends on who's right and who's wrong, doesn't it? If late stage VC and PE are by and large better at understanding the net present value of all future cash flows than the public markets, the best way forward is for them to find a way to provide liquidity for founders, employees, and earlier stage investors other than going public. Lowing valuations instead would be leaving money on the table for all those existing stakeholders.

[kludgekraft]

Completely agree. But I'm guessing today's late stage VC and PE still think of IPO as the ultimate 'exit'. If the investors sign up to provide enough liquidity or even providing partial exits to founders/employees, they'll have provided the company enough leeway to turn profitable.