With SpaceX filing for an initial public offering, the tone in markets is unmistakably bullish. Analysts are already calling it “one of the year’s most-anticipated market debuts” and “one of the largest IPOs ever.”

Unlike the outdated IPO framework of the last decade, SpaceX reminds us that going public is no longer an endpoint, but a strategic accelerant: a way to access deeper pools of global capital, expand infrastructure, and scale at a level private markets alone cannot support.

But at a private valuation of $1 trillion-plus, SpaceX — despite being a great company led by a visionary founder — also underscores everything wrong with the U.S. IPO market: by the time companies reach public markets today, almost all upside is in the rearview.

The threshold for going public in the U.S. has changed dramatically. Two decades ago, companies routinely listed at valuations of a few hundred million dollars. Amazon went public in 1997 at roughly $438 million. AOL, one of the defining IPOs of the early internet era, delivered returns exceeding 100x from its public debut to its peak. Public investors participated in the full arc of value creation.

That is no longer the case. Today, companies often need to reach a $2 billion to $3 billion valuation before even considering an IPO. Stripe was last valued at $65 billion in private markets. Databricks has been valued above $40 billion. SpaceX itself has raised capital at valuations exceeding $175 billion prior to any public listing. By the time these companies reach public markets, they are already global leaders.

Much of the benefit that once accrued to public investors is now captured in private markets. But staying private too long comes with real costs — such as a brittle capital structure where ownership is concentrated among a narrow group of insiders and a dependence on continued private funding. It also limits broader investor participation and delays the price discovery and discipline that public markets provide. In trying to avoid the scrutiny of public markets, many companies have instead traded it for different kinds of risks: less transparency, less liquidity, and fewer pathways to sustainable, long-term capital.

SpaceX serves as a signal that public markets are once again open at scale, but the math alone confirms that by the time unicorns like SpaceX, Anthropic, Stripe and Databricks go public, the exponential value creation is already gone.

So why are investors still fixated on mega-unicorn IPOs?

The next generation of outsized returns won’t come from trillion-dollar IPOs. They will come from smaller companies, listing earlier in their lifecycle, before global capital has fully priced them. Historically, the greatest gains have come from identifying category-defining companies before they were obvious — making the real opportunity — not just 100x, but 400x — companies with sub-$500 million valuations. As legendary investor Peter Lynch wrote, that’s how you get “one up on Wall Street.”

SpaceX is just a distraction.

Jeffrey Stewart is the Managing Director at GPO Fund, founder of multiple venture-backed companies (two previously on the Inc. 500 list), an adjunct professor at Columbia University, and the author of "Global IPO: The Great Rewiring of Capital Markets."

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