Retail Investors Are Locked Out of the Fastest-Growth Phase — Neostellar’s Lee Says That’s Starting to Change

The Shift: Why the Biggest Wealth Creation Happens Before the IPO

Retail investors who wait for a company to go public are increasingly buying a ticket after the best seats have already been filled. Willy Lee, a principal at publicly traded investment firm Neostellar (NASDAQ: NSLR), says businesses today often build massive value and scale well before they ever ring the opening bell — and the traditional structure of venture capital has made it almost impossible for ordinary people to get in early.

Lee points to SpaceX as the extreme case: public-market investors had to wait more than 20 years before shares became available, by which time the company was already valued at $1.77 trillion. That pattern, he argues, is extending to today’s most-hyped AI companies. Firms like Anthropic and OpenAI might not offer retail investors a chance to participate until they are already the size of major S&P 100 businesses. “It is a very different opportunity from being able to invest in Google in 2004 at $23 billion,” Lee told Investing.com.

The numbers back up the trend. Citing PitchBook data, Lee noted that the average tech company going public in recent quarters had $831 million in revenue, four had already surpassed $1 billion, and 25% were profitable — more than double the share in 2021. Meanwhile, the median revenue multiple at IPO has fallen from 17x in 2021 to just 4x, meaning public investors are being asked to pay lower multiples but are also entering after the most explosive growth is over.

In response, a wave of publicly traded vehicles — including Neostellar — is building portfolios of late-stage private companies, giving retail investors a way to gain exposure earlier. Lee sees this as a structural shift: “When our platform launched in 2011, we were one of very few publicly traded vehicles focused on providing this type of access. Today, a growing number of publicly accessible vehicles are pursuing a broader range of private-market strategies.”

Behind the Trend — What the Data and Neostellar’s Strategy Reveal

The SpaceX Precedent and the AI Rush

Lee uses SpaceX to illustrate a fundamental problem for ordinary investors: by the time a company with transformative technology hits the public market, much of the wealth creation has already occurred. The same dynamic is now at work in artificial intelligence, where investors are underwriting technological progress rather than proven revenue. That can make valuations look expensive, but Lee points out that leading AI-native companies are already generating high growth from much larger revenue bases than the enterprise-software unicorns of 2021. The risk is that investors who wait for an IPO may never see the kind of returns early backers captured.

What the PitchBook Data Actually Says About IPO Maturity

The numbers show a clear shift. In addition to the revenue and profitability figures, the collapse in median revenue multiples — from 17x to 4x — suggests the market is no longer rewarding hype at the same level. Companies are being asked to build bigger businesses and prove more before public investors get access. That is a double-edged sword: it means IPO buyers are getting more mature, less speculative companies, but it also means they are missing the high-risk, high-return phase that creates life-changing wealth.

How Neostellar Aims to Skip the Line

Lee argues that Neostellar’s strategy differs from other publicly traded vehicles by focusing on businesses “before they achieve broad recognition and associated scale.” Examples include positions in WHOOP, CoreWeave and Palantir. The firm is betting that differentiated sourcing — identifying promising companies early — can generate venture-like returns for its shareholders. However, this approach also concentrates risk: smaller, less-proven companies carry a higher chance of failure, and Neostellar’s own success depends on picking winners before the crowd.

What Everyday Investors Can Do About a Changing IPO Landscape

• Explore publicly traded vehicles that hold stakes in late-stage private firms. Neostellar itself is an example, and a growing number of such funds exist. Look at their portfolios — Neostellar cites positions in WHOOP, CoreWeave and Palantir — and understand whether the strategy seeks exposure before broad recognition or simply tracks already-famous names.
• Recognize that buying at IPO now often means entering after the steepest growth. The median revenue multiple has fallen from 17x to 4x since 2021, signalling that companies are bigger and more mature when they list. The potential for a Google-style 2004 return is much smaller; the trade-off is lower speculative risk.
• Pay attention to sourcing and underwriting. Lee emphasizes that Neostellar aims to invest in businesses before they gain widespread attention. Different vehicles will have different sourcing edges; ask whether the manager can actually get access to the most promising private deals — that is where the value is created or destroyed.
• Factor in liquidity and concentration risk. Private-market exposure through a public vehicle still carries the underlying risk of the portfolio companies, many of which are not yet profitable. Publicly traded shares of the vehicle itself can be bought and sold, but the underlying assets remain illiquid, so performance can diverge from net asset value during market stress.