.png)
How Alternative Capital Lets Startups Grow Without Going Public
- Frank Dappah
- Oct 8
- 4 min read
Why founders are trading IPO roadshows for private equity rounds, and how companies like Future Cardia are rewriting the rules of startup finance
Just launched your new business and need resources to ace direct marketing at lower costs with higher ROI?
Check out Salesfully’s course, Mastering Sales Fundamentals for Long-Term Success, designed to help you attract new customers efficiently and affordably.
For decades, the typical startup journey ended with a bell-ringing ceremony on Wall Street. But the script has changed. Increasingly, startups are staying private longer, opting for alternative capital—from venture debt and private equity to Regulation A+ crowdfunding—to finance their expansion.
It’s not just a fad. A confluence of market maturity, regulatory friction, and investor appetite has created a new equilibrium. According to research by Jay Ritter at the University of Florida, the median age at IPO has nearly doubled over the past two decades. That means today’s unicorns often live a full corporate lifetime before they ever list.
From IPO dreams to private realism
The traditional startup roadmap—seed, Series A, IPO—was designed for a different era. Public listings once conferred legitimacy, liquidity, and access to broad pools of capital. Yet, as McKinsey & Company’s research on private growth firms shows, compliance burdens and market volatility have made the IPO less of a finish line and more of a bureaucratic marathon.
The median age of U.S. tech companies going public is now over 10 years, up from 4 years in the late 1990s, per Morgan Stanley’s private markets report.
The argument is simple: why trade flexibility for quarterly earnings calls?
Vanguard’s own corporate research note adds nuance, noting that while not all industries show the same trend, tech and medtech clearly do. In those sectors, capital efficiency and confidentiality trump exposure.
The rise of alternative capital
As the IPO pipeline thinned, alternative financing options expanded:
Private markets have become more sophisticated, institutional, and liquid—without being public. Hamilton Lane’s “Staying Private Longer” analysis notes that this flexibility allows founders to “own more of the growth curve” before exit.
Meanwhile, Pathstone’s “Shift from Public to Private Capital” white paper highlights how continuation funds and structured liquidity programs are making private markets behave more like miniature exchanges.
Future Cardia an example of the new funding paradigm
Few case studies illustrate this transition better than Future Cardia, a medtech innovator building implantable cardiac monitors.
Rather than courting Wall Street, Future Cardia launched a Reg A+ equity offering on StartEngine, allowing ordinary investors to buy into a clinical-stage company for as little as $348. According to KingsCrowd’s investor report, the raise targeted a $51 million pre-money valuation, with 60,000 hours of cardiac data collected across 39 human implants to train its AI models.
This approach gives Future Cardia access to a large base of retail backers while maintaining private control and funding ongoing clinical trials without relying on traditional venture capital. It’s democratized venture capital in practice.
Watch: Continuous Care — How Future Cardia Is Changing Heart Monitoring for a visual overview of the company’s technology and funding vision.
The consequences of staying private longer
For founders
Control: Decisions remain founder-driven, not investor-driven.
Patience: Longer runways enable deeper R&D cycles.
Complexity: Private compliance may still grow, especially under SEC scrutiny of secondary platforms.
For investors
Illiquidity: Longer holding periods test patience.
Access gaps: Only accredited or Reg A+ participants can invest directly.
Transparency: Valuations depend on limited disclosures and occasional mark-ups.
For markets
When innovation stays private, public indices lose visibility into emerging industries. Fewer IPOs mean fewer mid-cap opportunities for retail portfolios—a dynamic Morgan Stanley warns could “shift long-term alpha into the private sphere.”
Still, the flexibility of private finance has spurred record funding activity: over $400 billion in private market inflows in 2024, per McKinsey & Company’s analysis of global private equity data.
Looking ahead
The staying-private era will likely persist until the trade-offs invert—when liquidity outweighs control or valuations demand a public market reset. Until then, startups like Future Cardia show that alternative capital isn’t a stopgap; it’s a structural evolution.
The public markets will always matter—but in the modern startup economy, growth is increasingly private by design.
Just launched your new business and need resources to ace direct marketing at lower costs with higher ROI?
Check out Salesfully’s course, Mastering Sales Fundamentals for Long-Term Success, designed to help you attract new customers efficiently and affordably.
Don't stop there! Create your free Salesfully account today and gain instant access to premium sales data and essential resources to fuel your startup journey.
Comments