Odd Lots — “A16Z's David George on How Private and Public Markets Fused Into One”

Podcast: Odd Lots, Bloomberg
Hosts: Joe Weisenthal, Tracy Alloway
Guest: David George — Head of Growth Fund, Andreessen Horowitz (A16Z)
Date: February 20, 2026

Episode Overview

This episode delves into the evolving relationship between private and public markets, with a particular focus on why successful, high-growth tech companies are remaining private longer or indefinitely. Joe Weisenthal and Tracy Alloway interview David George, the head of A16Z’s Growth Fund, gaining expert insights into the mechanics, incentives, and consequences of this trend from both investor and company perspectives. The discussion ranges from capital structures and liquidity mechanics for employees to the seismic shifts brought by AI investment and the complexities of SPVs.

Key Discussion Points & Insights

1. Private vs. Public Markets: The Mega-Company Shift

(03:15–06:43, 06:43–09:43)

• Companies are staying private much longer:
  The largest and fastest-growing tech firms are delaying IPOs, unlike previous generations.
• Staggering private market size:
  • ~$5 trillion in private tech market cap, nearing 25% of the S&P 500 and 15% of the NASDAQ.
  • The 10 largest private companies account for 40% of the private tech market cap.
• Decline in public listings:
  • Number of public companies has halved over 20 years; massive shift in market composition.

"If you look at the private markets, highly valued technology companies represent about $5 trillion in market cap. That's almost a quarter of the S&P 500."
—David George (06:53)

• Private market growth has outpaced public market value creation in recent years.

2. Why Stay Private? Structural Trends

(09:43–12:21)

• Deeper, more liquid private capital pools:
  Companies now access enormous amounts of cash privately, reducing IPO pressure.
• Public market burdens:
  • "Operational headaches" from regulatory filings, reporting, and volatility.
  • Public focus has shifted to large-caps; small caps struggle for attention.
• Managing volatility:
  Private markets offer founders more control over stock price fluctuations, which can be critical for employee retention and morale.

"If you can get pretty close to the dynamics that you get in the public markets without volatility, it's pretty compelling to remain in the private markets."
—David George (09:41)

3. Employee Liquidity: Solutions in Private Markets

(12:21–15:48, 15:48–16:31)

• Public market employees:
  Receive regular, liquid RSU grants — “like cash comp.”
• Private market adaptations:
  • Tender offers allow employees to sell a portion of vested stock, often annually, imitating public market liquidity.
  • Example: SpaceX runs bi-annual tender offers, aiding retention.

"SpaceX has, you know, famously done a really good job running twice a year tender offers for their employees."
—David George (14:56)

• Trade-offs exist:
  There may be less upside for employees vs going public, but the gap isn't vast.

4. The San Francisco Mindset: Is IPO Still the Ultimate Goal?

(15:48–16:31)

• While mega-IPOs remain aspirational, especially for founders with massive capital ambitions, a growing comfort exists with perpetual private status, especially with the growth of enormous private capital.

"The best of the best companies want to IPO... the ambition for most founders is still, you know, to have an IPO and to be a large, established, important public company."
—David George (15:55)

5. SPVs and Secondary Markets: The Double-Edged Sword

(16:31–19:44)

• Founders dislike opaque SPVs (Special Purpose Vehicles) that mask their cap tables or bring in unwanted/invisible investors.
• Some companies have “gone to war” with SPV organizers to maintain control.
• SPVs are risky for investors (all eggs in one basket), and founders often seek to exclude them.

"Founders for the most part really don't like it. They want to know who is on their cap table."
—David George (17:18)

6. Pricing, Mark-to-Market, and Value Creation Shifts

(19:44–24:57)

• Private market investments, especially in later-stage growth, are capturing more of the value-creation pie compared to a decade ago.
  • 10 years ago, 88% of value creation was post-IPO (public markets); now, over half happens before IPO.
• Private markets may offer a discount: A16Z believes many of its portfolio companies would trade at higher multiples as publics.
• Challenge for public investors: “Grokking” high growth rates — many undervalue how persistent rapid growth can be.

"If you could let me have a career... buying at 21 times revenue and they're growing 100%, that would be an incredible trade."
—David George (23:29)

7. Distributions: What Happens After IPO?

(26:09–28:58)

• A16Z often distributes shares to its own investors (LPs) post-IPO, instead of an immediate full exit.
• Still, the firm may hold significant positions if it believes a company is undervalued or retains strong growth prospects.

"Just because the company goes public doesn't mean we will exit... we would bias to hold it a little bit longer if the founder is still running the company."
—David George (27:04)

8. The IPO Catalyst: What Finally Pushes a Company Public?

(28:58–31:02, 31:02–32:06)

• Most common driver: Access to larger capital pools for massive capex ambitions (e.g., building data centers).
• Secondary drivers:
  • Advantage in employee compensation competition.
  • Currency for M&A (stock as acquisition currency).
  • Enhanced brand, trust, and presence — particularly for consumer-facing or enterprise brands.

9. AI: The Game Changer for Private Capital

(31:02–39:31)

• AI companies are "speed running" growth, reaching huge scales and capital needs rapidly.
• The demand for AI infrastructure is massive, but so far, there’s no evidence of overbuild — “No dark GPUs” unlike the fiber era.
• A16Z is a leading investor in the sector, with stakes in 2/3 of all private AI revenue.
• AI’s rapid scaling could push more companies public for capital, but also reinforces the appeal (and attractiveness) of the private markets.

"If you were to just sum together all of the AI revenue of the companies in the private markets, we're investors in about 2/3 of it."
—David George (35:41)

10. Application & Software Landscape: Who Survives the AI Tsunami?

(39:31–45:47)

• Not all innovation comes from model owners — solutions with domain expertise, integration, and support can still thrive automously.
• Incumbent software vendors risk slowdown: new budget is disproportionately flowing to AI initiatives.
• The next big change may be in software business models: a shift to outcome-based pricing, not just consumption or seat-based.

"If you get to the point where the predominant way enterprises want to buy is via outcomes... I think it's going to be really tough for [incumbents]."
—David George (45:43)

Notable Quotes & Memorable Moments

• On the magnitude of change:
  “Private markets, highly valued technology companies represent about $5 trillion in market cap. That’s almost a quarter of the S&P 500.” — David George (06:53)

• On liquidity for employees:
  “It’s not a perfect substitute, but... for the employees or potential new hires who are true believers, I think it's enough to combat that RSU public market dynamic.” — David George (14:21)

• On staying private vs. public:
  “The pools of capital in the public markets are still much deeper. So if you need to raise $50, $100, $200 billion...chances are, you’ll end up in the public markets.” — David George (16:12)

• On SPVs:
  “Founders for the most part really don’t like it. They want to know who is on their cap table.” — David George (17:18)

• On valuation and growth:
  “If you could let me have a career...buying at 21 times revenue and they're growing 100%, that would be an incredible trade.” — David George (23:29)

• On public-private value shift:
  “Of the best companies that were going public 10 years ago, 88% of their return happened in the public markets... now, 55% happens in private markets.” — David George (22:36)

• On employee share sales stigma:
  “We never really see a chance for employees to...say, oh my gosh, I’m out, I want to sell 100%...” — David George (33:01)

Timestamps for Key Segments

• 04:08 — Definition and role of the Growth Fund at A16Z
• 06:43 — Data on size, trends of private vs. public markets
• 09:43 — Why private is more appealing: reporting and volatility
• 12:21 — How liquidity works for employees in public and private markets
• 17:18 — Problems with SPVs and founder perspectives
• 19:44 — Pricing, value creation shifts, and revenue multiples
• 26:09 — How A16Z handles post-IPO holdings and distribution
• 28:58 — What finally prompts companies to go public
• 31:02 — Does AI’s capital needs move the needle back to public?
• 35:38 — Differentiating AI models, scaling, and demand signals
• 39:31 — The risks for non-AI and incumbent software vendors

Flow and Tone

The episode is analytical yet conversational, often peppered with anecdotes from Silicon Valley (such as Facebook IPO hats and Bay Area real estate), and balances deep structural explanations with actionable examples from A16Z’s own portfolio. David George brings data and perspective while the hosts maintain skepticism and curiosity—making the topics approachable to finance enthusiasts and industry insiders alike.

For Anyone Who Hasn't Listened:
This episode delivers a thorough explanation of why, in the AI era and beyond, the line between private and public markets is blurrier than ever — and what that means for founders, employees, and investors. Whether you’re interested in capital markets, tech company mechanics, or the future of AI, these insights are crucial to understanding where the financial and innovation ecosystems are headed.