Why Fewer Companies Are Going Public and What It Means for Investors

Over the past few decades, the number of companies listed on U.S. public stock exchanges has steadily declined, even as private companies proliferate and grow larger. For investors, wealth managers, and high‑earning families planning long‑term financial strategies, understanding this shift is more relevant than ever.

The Decline in Public Companies

In the 1990s, there were more than 8,000 publicly traded companies in the United States, a vibrant universe of investment opportunities. Today, that figure has dropped to around 4,000 or slightly more, representing roughly half as many public companies as three decades ago.

Several factors are contributing to this trend:

• Many companies are choosing to stay private longer or indefinitely, in part because ample private capital is available from venture capital and private equity sources.

• The costs and regulatory requirements of going public, including reporting obligations and compliance expenses, can be significant and discourage traditional initial public offerings (IPOs).

• The median age at IPO has climbed, meaning companies often wait many more years before considering a public listing.

The Rise of Private Companies

As public listings have declined, the private sector has grown substantially. The vast majority of U.S. companies operate as private entities; more than 30 million businesses in the U.S. are privately held, but fewer than 5,000 are publicly traded.

When looking at revenue size, the difference is even more striking:

• Approximately 87% of U.S. companies with annual revenue greater than $100 million are private, leaving only about 13% that are publicly listed.

• Research also suggests that for companies that might have previously gone public, their median revenue would have been around $300 million before remaining private, representing a significant portion of economic activity now outside the public sphere.

While comprehensive, up‑to‑date data specific to the number of private companies with $250 million or more in revenue is not published in a single authoritative source, these broader statistics illustrate how massive the private company segment has become, particularly among larger enterprises. The number of PE‑backed private firms in the U.S. is well into the thousands, far exceeding the count of public companies.

Why This Matters to Investors

This trend has important implications for investors and financial planning:

1. Investment Opportunity Sets Are Changing

With fewer companies going public, many high‑growth opportunities reside in the private markets. Institutional investors and accredited individuals often have access to private equity, venture capital, and private credit strategies that are not available on public exchanges.

2. Traditional Public Market Exposure Is Narrowing

As the number of public companies shrinks, index diversification can become more concentrated in larger, established firms. Investors relying solely on public equities may miss exposure to early‑stage growth companies.

3. Growing Importance of Private Markets in Financial Planning

For high net worth individuals and families, alternative investment allocations that include private companies may play a more meaningful role in overall portfolio strategy, risk management, and long‑term financial objectives.

Considerations for Wealth Planning

Integrating private market exposure requires thoughtful evaluation:

• Liquidity and horizon: Private companies and private investments often have longer investment horizons and limited liquidity compared to public stocks.

• Risk and suitability: Alternative investments should align with risk tolerance, financial goals, and overall diversification strategy.

• Access and structure: Private offerings frequently involve specific eligibility requirements, and investors should understand associated fees, governance, and reporting structures.

Closing Thoughts

The decline in public companies and the corresponding rise of private firms reflects a broader shift in how businesses access capital and manage growth. For investors and families planning for the future, recognizing this trend can help inform decisions about portfolio diversification, alternative investment strategies, and long‑term wealth management.

Understanding where growth companies are operating, public or private, can be an important part of building a resilient financial plan that aligns with your goals.