Venture capital's shift to private markets is locking ordinary Americans out of AI wealth creation, requiring policy reforms to broaden access

The traditional IPO path is being replaced by a private-market system where mega-funds, mutual funds, and sovereign capital are investing in companies like OpenAI, Anthropic, and SpaceX far beyond the point where they once would have gone public, with much of the value creation happening before public access.

Regulatory burdens—including Sarbanes-Oxley compliance costs, securities laws that reserve attractive private securities largely for institutions and wealthy individuals, and mass shareholder litigation—discourage companies from going public, allowing them to stay private longer and avoid disclosure and litigation exposure.

The public market has shrunk, with only about 3,100 companies in the index, compared to the Wilshire 5000 benchmark of an earlier era, meaning ordinary investors can no longer participate in the upside of major technology companies the way they could with Microsoft, Cisco, Intel, and Amazon.

The author proposes shareholder tort reform (including loser-pays rules), broader individual access to private companies through pooled vehicles, and creation of a U.S. sovereign wealth fund—a model already adopted by more than 90 countries including Norway, Saudi Arabia, the UAE, Malaysia, Nigeria, and Peru, and by U.S. states such as Texas, Alaska, and New Mexico.