Sheel Mohnot, an investor with Better Tomorrow Ventures, called the four-year schedule “dangerous” and advocated for a timeline twice as long for company founders. His premise is compelling: “When a co-founder leaves with a large amount of equity on the cap table, but the business is mostly yet to be built, the dead weight makes it really hard to hire great people and raise more capital.”
The existing formula was established in a different era. In 1999, during the dot-com boom, the median age for companies that went public was five years, according to research from Jay Ritter, a professor at the Warrington College of Business at the University of Florida. In 2024, the IPO age was 14.
The longer wait has made retention harder; startup equity is only worth something if there’s a liquidity event. Many companies have begun creating their own, letting employees cash out in secondary transactions.
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