Part 6/11:
This leads to critical concerns about what occurs when the valuation becomes disconnected from actual business fundamentals. If investors and employees expect to cash out at increasingly higher multiples—say, a 10x or 20x on a $500 billion valuation—the pressure on these companies to maintain soaring growth becomes immense.
A potential scenario is that as these companies hold off on IPOs, their valuations may continue inflating, with no clear "exit." When they finally do go public, their market caps could far exceed initial expectations, creating a bubble that may eventually burst if growth stalls or investor enthusiasm wanes.