Introduction

Companies and issuers now operate in a capital landscape where public and private markets are continually intersecting. Across equity and debt, the traditional paradigms are breaking down, with participants more actively evaluating a range of financing options. We believe that the primary driver for this change is access to a much larger toolkit, requiring a more nuanced decision matrix. This involves weighing not only the cost of capital, but also considerations of flexibility, governance, and long-term strategic needs, among many other factors.

In this paper, we dive into what public/private convergence means for companies and issuers in practice and highlight its critical implications for strategic capital decisions going forward.

• Equity markets: The end of binary capital choices
• Debt markets: Private credit offers a parallel channel
• Strategic implications for decision makers

Equity markets: The end of binary capital choices

For decades, corporate finance for private companies followed a relatively linear script: raise venture or growth capital, scale the business, go public, and thereafter access public equity and debt markets for cheaper capital and improved liquidity (Figure 1). That model is no longer the only viable path. Today, companies can access institutional capital, provide shareholder liquidity, and optimize their capital structures without committing immediately to public market status.

In fact, companies now spend a median of 11 years as private companies compared to 7 years just a decade ago.¹ Moreover, companies are now much larger when they go public (Figure 2). The average market value at IPO has nearly doubled over the last 15 years, from US$2.1 billion (2011 – 2015) to US$4.0 billion (2021 – 2025), though this shift is driven primarily by the upper end of the distribution. Still, a growing cohort of newly public companies (particularly in technology) are effectively bypassing the small-cap universe altogether. This has contributed to the shrinkage of the Morningstar small-cap index portfolio by over 15% since 2018.² Together, these shifts suggest that public equity markets are capturing companies later in their development, and in many cases after the most dynamic phase of revenue growth has already occurred. Notably, among 111 public software companies, only three currently carry consensus revenue growth expectations above 30%.³

Today’s trade-offs between going public and staying private are more complex, as public and private capital is increasingly available to high-quality companies. Depending on timing, scale, management preparedness, and other nonfinancial factors, companies can now:

• Raise private capital from crossover or later-stage growth investors
• Execute structured secondary liquidity programs
• Access private credit markets at scale
• Delay or strategically time IPOs
• Blend public and private financing instruments
• Combine public listing benefits with private-style capital formation, including PIPEs and private placements

Why has this changed? Liquidity without listing

One of the most significant shifts for private companies is the rise of structured private liquidity programs, supported most notably by the rise of the secondary market for private companies and funds. While this trend has been ongoing for over a decade, the prevalence of secondaries exploded in recent years with 2024 seeing secondary tender-offer proceeds exceed VC-backed IPO volume. In addition, the number of company-sponsored secondaries increased 83% year over year in 2024.⁴ The secondary market also broadly grew 48% to surpass US$240 billion in annual transaction volume for the first time in 2025.⁵

This means, for most companies, liquidity and growth capital are no longer exclusively tied to a public listing. Critically, though the market has grown substantially, it is still dwarfed by the liquidity available in the public markets. For example, the average daily volume of the public markets more than doubles the US$240 billion secondaries annual market volume (Figure 3).⁶

The trade-offs when going public

Public markets clearly offer much greater scale, ongoing liquidity, and high brand visibility. In contrast, private markets allow for greater long-term capital alignment (less quarterly earnings pressure), lower governance costs, and reduced exposure of competitive information. The rise of private capital does not necessarily eliminate these trade-offs, but it allows companies more flexibility in the timing of when to assume them.

Yet, as companies scale, their liquidity needs, ownership concentration, governance expectations, and capital requirements often exceed what private markets can comfortably support. In fact, some of today’s largest private companies have valuations that exceed the total annual volume of private secondary markets. This makes an exit via the public markets a necessary conclusion to return capital to investors for the largest, fastest-growing private companies.

In our view, public markets remain essential for broadening ownership, providing durable liquidity, and supporting long-term capital needs at scale. The implication is powerful: IPO timing has become strategic rather than mandatory.

Debt markets: Private credit offers a parallel channel

We see the convergence of public and private markets becoming even more pronounced, with the continued growth of private credit creating a potential addressable market exceeding US$30 trillion. The US$1.7 trillion global private corporate credit market is projected to nearly double by 2028.⁷ This rapid growth enables issuers to access public or private market debt financing depending on priorities like:

• Certainty of execution
• Speed to close
• Covenant flexibility
• Disclosure requirements
• Pricing and structure

For issuers, this expands optionality, as public bond markets are no longer the only scalable debt solution, with private credit funds now competing directly with the broadly syndicated loan and high-yield bonds market.

The trade-offs between issuing in public or private markets

In public fixed income markets, issuers benefit from large, liquid pools of capital and relatively low financing costs. However, these markets generally offer "vanilla" terms such as standardized tenors, minimal covenants, and limited flexibility. Notably, first-time or infrequent issuers also need to absorb significant upfront costs, including ratings processes, disclosure frameworks, and standardized documentation to access the public market’s lower headline costs. These hurdles can be navigated, but they make public issuance inefficient for issuers with bespoke financing needs or limited issuance frequency.

In comparison, private credit offers issuers greater flexibility as terms can be customized, covenants negotiated, and structures tailored to the issuer's specific situation. This can be attractive for projects or sectors not well represented in public markets, such as infrastructure or sports franchises. Critically, however, these benefits are weighed against higher financing costs and smaller pools of capital.

The growth of private capital has enabled issuers to evaluate these trade-offs more directly. Importantly, issuers can also increasingly optimize financing strategies by leveraging both public and private options as market conditions and project needs evolve. Below, we share three case studies where issuers now have greater optionality.

Strategic implications for company management teams

From the company perspective, the convergence of public and private markets creates three fundamental shifts:

1. IPO becomes a strategic optionality: The IPO is no longer required to unlock liquidity or growth capital, though for the largest private companies it may ultimately become necessary. For many others, it is a strategic milestone that can be pursued when it enhances brand, currency, or acquisition strategy.
2. Liquidity planning becomes continuous: Secondary programs, structured transactions, and recapitalizations allow ongoing capital table management.
3. Capital stack design is increasingly dynamic: Instead of following a fixed life cycle, companies can design capital structures dynamically, balancing private equity, crossover capital, private credit, and public instruments as conditions evolve.

Companies now have more tools, more flexibility, and more negotiating leverage than at any point in recent decades. The central question is no longer, “When do we go public?” but rather “What combination of public and private capital best supports our long-term strategy?”

Strategic implications for debt issuers

For debt issuers, convergence across public and private credit markets is fueling three ongoing evolutions:

1. Funding channels have become increasingly interchangeable: Public bonds, syndicated loans, private placements, and private credit are now evaluated side by side.
2. Execution is now market-driven: Issuers can reassess public versus private issuance deal by deal, weighing factors like pricing, flexibility, and ratings requirements as conditions evolve.
3. Infrastructure shapes long-term economics: For frequent issuers, the fixed costs of ratings, disclosure, and documentation can justify public market access over time. For others, private markets may remain more efficient.

The question has shifted from, “Where do we always raise capital?” to “Which market structure best balances cost, flexibility, and scalability across our capital needs today and over time?”

¹Morningstar “Unicorns and the Growth of Private Markets,” 20 January 2026. | ²Morningstar 29 January 2026. | ³Daloopa and S&P Capital IQ. Data as of 7 May 2026. | ⁴Nasdaq Private Market, State of the Private Market 2025. | ⁵Jefferies 2025 Global Secondary Market Review. | ⁶Ibid. | ⁷Deloitte, Private Credit Growth May Attract CFOs, March 2025. | ⁸Source: Wellington Management. Estimates as of 31 March 2026.