Goldman Sachs CEO Advises Startups to Delay IPOs

Goldman Sachs CEO Questions the Value of IPOs

Goldman Sachs, a leading investment bank heavily involved in initial public offerings (IPOs) as a “book runner,” typically earns substantial fees – often millions of dollars – for underwriting each listing.

However, CEO David Solomon recently advised startups to carefully evaluate the benefits of going public.

His comments were made during the Cisco AI Summit held in Palo Alto, as reported by the Financial Times.

Alternative Funding Options for Startups

Solomon suggested that startups possess the capability to achieve significant scale and secure ample funding within the private markets.

This can be accomplished without the complexities and burdens associated with being a publicly traded entity.

He expressed a candid view on public company status, stating, “It’s not fun being a public company.” He further questioned the appeal, asking, “Who would want to be a public company?”

Goldman Sachs' Shift Towards Private Markets

Goldman Sachs is increasingly focusing its efforts on collaborating with substantial private companies.

A notable example is their work with Stripe, assisting in its $6.5 billion funding round in 2023.

Stripe exemplifies a growing trend of large technology companies opting to remain private for extended periods.

This shift indicates a changing landscape in how companies access capital and manage growth.

The trend suggests that the advantages of private funding are becoming increasingly attractive to high-growth startups.