[7Figures2Commas]

Distrust of the stock market is mostly a retail investor phenomenon. If you look across the board at the increase in prices of just about everything in the past five years, especially yield-generating instruments (dividend stocks, REITs, MLPs, preferred shares, high-yield debt, etc.), I think it's hard to argue that investors have shunned public markets. Assets simply can't increase that much in value if there are no net buyers.

Granted, the low interest rate environment has essentially forced some of these investments and the money fueling them is cheaper than ever, but I don't see any evidence that there's a large contingent of professional investors fearful of public markets who are plowing their cash into illiquid startup stock instead.

If anything, the growth of markets like Second Market suggests that investors are increasingly eager to buy shares of private companies likely to go public in the not too distant future. Recall that there were investors snapping up Facebook shares before the IPO (the latest to the party hoping for a double-digit IPO pop lost a lot of money) and somewhat amazingly, there were even funds dedicated entirely to accumulating pre-IPO shares.

Even if you're not banking on an IPO as a startup investor, the other liquidity event you're looking for (acquisition) typically comes at the hands of a publicly-traded company, particularly if it's big, so you have stock market exposure there too. It's usually a lot easier for a public company to make a big acquisition when its stock is flying high.