Welcome to Altitude, the bi-monthly drop from Cirrus Capital Partners. We write for founders and finance pros building at the highest level. Expect sharp insights, market movers, and operator-grade tips.

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The Private Market Mirage

Why you may never own the next Apple—and why the numbers you see probably aren’t even real.

There’s a quiet revolution happening in the capital markets, and it’s one that few retail investors, middle-market founders, or even institutional allocators want to confront.

Two seismic forces are reshaping the landscape:

• The death of the IPO as an endgame
• The rise of mismarked, imaginary valuations in the private markets

The implications of these trends go beyond finance; they reflect a broader collapse in how markets signal value, risk, and opportunity.

Let’s break both of these down—and why they matter more than most people realize.

👉 Founder takeaway: If your liquidity strategy still ends in “IPO,” it may be time to rebuild the map.

Why going public became a last resort (and why it matters)

Going public used to be the dream. It was the liquidity event that let early investors cash out, employees finally exercise stock options, and the public buy into the next big thing.

That dream is rapidly dying.

Here’s what’s changed:

• 40% of VC-backed startups now expect to exit via private sale, not IPO
• Only 45% of companies even have IPO aspirations
• US IPO activity is down 11% YoY, and there’s no sign of recovery

Why? Because going public is painful:

• It’s expensive (bankers, lawyers, filings)
• It’s risky (markets can turn against you overnight)
• And it opens you up to regulatory headaches, activist investors, and quarterly pressure

Meanwhile, private capital has exploded. Sovereign wealth funds, family offices, crossover hedge funds, and late-stage VCs have more dry powder than ever—and they’re eager to buy in before a company ever sees the public market.

Which means companies are increasingly:

• Raising $100M+ late-stage rounds in private
• Letting founders and early employees cash out via secondary sales
• Delaying or avoiding the IPO altogether

And here’s the part that stings: By the time these companies do go public—if ever—their best years of growth and return are behind them.

You’re not buying the next Amazon in 1997.
You’re buying it in 2029 after it’s already been picked clean.

This shift has quietly turned the public markets into a dumping ground for pre-exit leftovers rather than a launchpad for innovation.

How fake valuations are quietly propping up the private markets

Valuations used to be a reflection of underlying performance. Now they’re often just artifacts of the last round’s term sheet.

And even within this booming private ecosystem, a more dangerous problem is festering: the illusion of value.

Bill Ackman put it bluntly:

Translation: the valuations listed on most VC and PE portfolios are fiction.

Here’s how that works:

• A startup raises at a $500M valuation in 2021
• That number gets “marked” on the books of every fund or institution that holds it
• But in 2025, it hasn’t exited, hasn't raised again, and the market has turned
• Still, everyone pretends it’s worth $500M—because no one wants to be the first to admit otherwise

This mispricing infects everything:

• University endowments (like Harvard and Yale) report strong private returns
• Fund managers earn carry based on inflated paper gains
• Founders walk around thinking they’re running unicorns
• New capital chases fantasy rather than fundamentals

It’s all fun until someone tries to actually sell.

Without IPOs or M&A exits, there’s no price discovery.
And if you can’t mark to market, you’re just marking to myth.

When everything is up and to the right on paper, no one asks whether the paper itself is real.

How this plays out for founders, funds, and everyone else

These distortions bleed into hiring plans, pricing strategy, M&A conversations, and board dynamics. They're not kept to the cap table.

Let’s bring this down to the level of founders, operators, and allocators—because the ripple effects are enormous.

Founders & mid-market CEOs

• Don’t assume IPO is a viable path. For most, it won’t be.
• Start thinking about strategic M&A, dividend recaps, and secondaries as your real liquidity plans.
• Focus on real profitability, not artificial paper valuations.
• If you’re raising capital, know that your last round’s valuation is not the floor—it might be the ceiling.

Investors & allocators

• Interrogate the marks. If your fund’s “top performing asset” hasn’t raised or exited in 3 years, it’s likely not worth what’s on the books
• Push for down rounds or markdowns when needed. Protect LP capital, not manager ego
• Be cautious of late-stage private deals marketed off fantasy valuations with no real comps

...And everyone else

• Understand that the next Apple, Amazon, or Netflix won’t be something you discover early on Robinhood
• That phase—the wealth creation phase—has already been sold to a PE fund, a sovereign wealth vehicle, or a Tiger Global crossover deal
• By the time it reaches you, you’re just the final buyer in a long chain of wealth extraction

Founders raising at high paper valuations need to ask themselves: would a real buyer pay this in cash today?

💡 LPs and allocators: Treat unrealized returns with skepticism. Until capital comes back as cash, it might just be fiction.

When exits disappear, truth does too

When exits slow down, fiction hardens into doctrine—and capital behaves accordingly.

There’s a chilling symmetry here:

• Fewer IPOs mean fewer exits
• Fewer exits mean phantom valuations stick around longer
• Phantom valuations distort capital, prolong inefficiencies, and hide risks

It’s like musical chairs, except the music isn’t playing, and no one really wants to admit these things.

We're in a new era of capital formation—one where transparency seems optional, liquidity is delayed, and most of the wealth goes to the few who are invited to the table early.

If you're not in the private rounds, you're not in the game.

It may be tempting to believe this is just a late-cycle correction. But what it really is, is the logical outcome of ten years of cheap money and opaque incentives.

The erosion of economic truth—and how to fight back

This is all the byproduct of a system that has quietly evolved to serve capital, not capitalism.

The public markets were once a mechanism for price discovery, wealth distribution, and broad-based participation. Now, they’ve become the exit ramp for institutions that already extracted the majority of upside in private.

Why? Because capital is hyper-abundant at the top, risk appetites are asymmetric, and governance friction in the public realm has become intolerable for founders and funds alike.

In essence, private markets offer control and illusion; public markets demand transparency and consequence. The result is an incentive structure that pushes even fundamentally strong companies to delay IPOs, inflate private marks, and engineer liquidity behind closed doors—while the average investor chases overpriced leftovers.

But the more subtle, longer-term danger lies in how this trend corrodes economic truth. With no price discovery, the feedback loop between capital and innovation breaks. Mispriced companies hoard talent, misallocate resources, and distort competitive landscapes for those operating with real P&Ls.

Over time, this calcifies capital. Pension funds, endowments, and even sovereign wealth vehicles risk becoming holders of long-duration fiction, unable to exit without marking down their books or triggering reputational damage.

Meanwhile, younger founders are being trained not to build great businesses, but to manufacture the appearance of value for the next greater fool in the private stack. If that fool stops buying—or regulators start forcing real marks—the unwind will be slow, painful, and structurally deflationary.

So, at the core, here, we're seeing a quiet erosion of trust in markets themselves. This time, the market is not imploding from overvaluation—it's showing signs of rust and rot from prolonged misalignment.

Read it online »

Restoring real value in a system designed to avoid it

The solve isn’t easy—but it starts with forcing price discovery back into the system.

That means more frequent markdowns, tighter audit standards for private funds, and greater LP scrutiny on unrealized gains.

In parallel, policy incentives could reward earlier public listings or penalize long-term opacity. Ultimately, we need to make transparency more profitable than illusion.

Founders and owners: you can make a dent by prioritizing real profitability, pursuing earlier exits with transparent terms, and refusing to play the valuation theater game just to impress downstream capital.

If we want capitalism to work, it has to reward truth, not theater.

Newsworthy stories

• Airbnb Goes Beyond B&B. Airbnb just dropped its biggest update in years: a redesigned app featuring Services and Experiences. Now you can order massage therapists, private chefs, and curated local adventures—all bookable in-app. It’s a bold play to go beyond lodging and own more of the travel (and lifestyle) wallet. » Read​

• Salesforce Buys Informatica for $8B. Salesforce is acquiring data management firm Informatica to strengthen its AI stack. The move sharpens its edge against Microsoft and Snowflake in the race for enterprise AI dominance. » More​

• EU Launches First Private Market Stress Test. The EU will stress test hedge funds, private equity, and pension funds for the first time ever. It's a clear signal that private capital’s free pass on regulation may be ending. » Why​

Founder tips

📌 Context switching kills momentum. Instead of batching similar tasks, batch similar mental modes. Protect your “builder brain” hours from shallow tasks like email, meetings, or Slack pings.

📌 Most founders overvalue hard skills and undervalue decision hygiene. Great operators move fast, sure, but they also consistently choose what to move fast on. Build rituals around clarity, not just speed.

📌 You can’t outsource conviction. Advisors, investors, and peers can give input—but if your energy wavers every time they disagree, you're not leading. The best founders use outside input to refine their bet, not replace it.

Financial markets

Meaningful market transactions

📈 Equity 💊 Hinge Health completed a successful IPO on the NYSE, offering shares at $32 and closing at $39. They raised $437M, valuing the company at ~$3B. 🧬 GlycoEra, a biotech firm, secured $130M in funding to advance its glyco engineering platform for targeted protein degradation therapies.

💳 Credit 🏢 Builders FirstSource replaced its existing $1.8B revolving credit facility with a new $2.2B facility, extending the maturity date to May 20, 2030. 💰 Encore Capital Group amended its global senior secured revolving credit facility, increasing the facility size by $190M to $1.485B. ​

♟️ M&A ℹ️ Salesforce shared its plans to acquire Informatica for $8B. The acquisition will bolster Salesforce's AI abilities (particularly for its Agentforce platform). ⚕️ TPG and Blackstone proposed a joint $16.5B billion leveraged buyout to take med-tech firm Hologic private. The bid was rejected, but talks could resume.

Recent Cirrus term sheets & transactions

$5M delayed-draw term loan facility for a MarTech company

$5M delayed-draw term loan facility for a consumer goods company in the beauty and haircare category

$25M senior credit facility for a specialty finance co. focused on SMB refinancings

$1.4M Term Loan & Revolver to a growth-focused, residential services company

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Altitude is the #1 newsletter for founders, operators, dealmakers, and capital allocators aiming to reach their highest potential. Read alongside 3,200+ founders and professionals every other week. 🏔️

To your growth,

Ryan Ridgway, Founder & Managing Partner

​Cirrus Capital Partners​

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