John Stepek asks whether the failure of some much-hyped IPOs signals the demise of the start-up private funding market 

Public ownership is so 1990s. The real money these days is made before companies go public on the stock market. By raising funds in private markets, firms can grow, free from the pressures of quarterly reporting, regulation, tight scrutiny and demanding retail shareholders.

In the US, the number of listed companies has almost halved since peaking in 1996. It’s a trend that accelerated after the 2008 credit crunch saw interest rates collapse, making debt funding more attractive and easier to raise for entrepreneurs.

This is a key driving force behind the boom in the valuations of privately backed companies. The rise of start-ups backed by venture capitalists (VCs) and private equity firms has gifted us the term “unicorn” – an unlisted company valued at more than US$1 billion.