All quiet in the private markets?

It’s a bit of an interesting time right now in the private markets.

On the surface, you have the largest AI and AI adjacent companies raising round after round at large valuations. These companies like OpenAI, Anthropic, Databricks, etc. dominate the headlines day after day. It feels like every other day there is a new mega round into one of these AI companies.

But what about the rest of the market? There are hundreds (thousands depending on how you see them today) of other “unicorns” sitting underneath the top names.

On the other end of the spectrum of the incredibly fast growing AI companies are the startups that have plateaued in the last few years. They may be profitable, and possibly growing but doing so slowly. Many of them are going to have to effectively reinvest themselves in order to get back in the race to an exit. I suspect what will happen is that many of them will just turn into self-sustaining SMBs over the years as they are left by the VC market.

Somewhere in the middle, there’s a handful of these companies doing well albeit a bit more under the radar and much slower than what’s happening in those AI companies. These companies have been quietly growing towards an IPO and offering liquidity to their employees. The PR angle with these companies have seen to be to stay under the radar whether that’s by their choice or not.

For a fan of technology, the AI companies are the ones that I find interesting. It’s fun to learn about them and see how they are going to change the world.

From an investing standpoint, I’m more focused on the companies in the middle right now. There are a ton of great companies being built that are being overlooked. Joining the circus of the thousands of people chasing the top 15 names is something that does not make great business sense for us right now although that may change.