As more tech start-ups stay private, so does the money
Even though prominent members of the tech industry have always expressed skepticism and even hostility toward the finance industry it has always looked to Wall Street and the ritual of a public offering for affirmation, and of course wealth. But, over the past couple of years this has started to change, and IPO's have become d&eacute;class&eacute;, and Silicon Valley's sudden distaste for seeking a public listing may be the single most important psychological shift underlying the current tech boom.&nbsp;
It used to be that public investors who got in on the ground floor of an initial offering could earn historic gains. If you invested $1,000 in Amazon at its I.P.O. in 1997, you would now have nearly $250,000. If you had invested $1,000 in Microsoft in 1986, you would have close to half a million. Public investors today are unlikely to get anywhere near such gains from tech I.P.O.s. By the time tech companies come to the market, the biggest gains have already been extracted by private backers.

Just 53 technology companies went public in 2014, which is around the median since 1980, but far fewer than during the boom of the late 1990s and 2000, when hundreds of tech companies went public annually, according to statistics maintained by Jay Ritter, a professor of finance at the University of Florida. Today’s companies are also waiting longer. In 2014, the typical tech company hitting the markets was 11 years old, compared with a median age of seven years for tech I.P.O.s since 1980.

Over the last few weeks, I’ve asked several founders and investors why they’re waiting; few were willing to speak on the record about their own companies, but their answers all amounted to “What’s the point?”

Initial public offerings were also ways to compensate employees and founders who owned lots of stock, but there are now novel mechanisms — such as selling shares on a secondary market — for insiders to cash in on some of their shares in private companies. Still, some observers cautioned that the new trend may be a bad deal for employees who aren’t given much information about the company’s performance.

“One thing employees may be confused about is when companies tell them, ‘We’re basically doing a private I.P.O.,’ it might make them feel like there’s less risk than there really is,” said Ms. Morrill of Mattermark. But she said it was hard to persuade people that their paper gains may never materialize. “The Kool-Aid is really strong,” she said.