[nrao123]

I don't get it. A lot of people (e.g. a16z) are saying that late stage financing / "private IPOs" are keeping the wealth in private investors instead of public investors when there is a public IPO.

But- the investors in these "private investors" such as Hedge Funds, PE funds or even late stage mutual funds (Rowe Price / Fidelity...) are LPs such as pension funds. The money in these pension funds are that of the common man again right?

So the common man is taking a longer term view & getting a better return through alternative investment vehicles (PE funds etc).

That is a good thing overall right? We complain about public markets being short term. But then we also complain about common people taking a long term view via LPs investing in late stage funding.

From the article: If the private investors are wrong, employees, founders and a lot of hedge funds could be in for a reckoning. But if they’re right, it will be you and me wearing the frown — the public investors who missed out on the next big thing.

[prostoalex]

1) The set of people who have access to venture capital through pension funds is smaller than the set of people who have access to public stock market.

2) Historical figures of stock market performance include such breakaway successes as MSFT and AAPL with the stories of "if you bought 100 shares of X on the day they went public, it would be worth [high dollar amount] today". Remove the outliers responsible for such gains, and general public will respond by removing liquidity from public markets until it becomes more attractive.

3) Things like DJIA and S&P 500 for better or for worse are viewed as proxies of US economic health, and are frequently used as underlying metrics of investor optimism, etc. Flatter indices are boring and are frequently interpreted as "going nowhere".