Because liquidity is valuable and cash cows don't live forever. VCs and aggressive investors are looking for big returns, not cash thrown off. If does make me wonder if a VC or angel fund could solicit patient capital, like from a pension fund or life insurance, that would be content with owning dividend-rich stock. That's an area as unexploited as YC's niche was three years ago.
> are looking for bug returns, not cash thrown off
You can get huge returns from a profitable private company out of owners equity withdrawals over a short period. If the business is not capital intensive there's no real reason to go public, growth market or not.
I see nothing wrong with focusing on the "flip" if the business fundamentally needs a lot of capital or a big parent company. But nobody ever even mentions dividends or buybacks at private valuations. It indicates to me that people are most focussed on taking advantage of a possibly irrational market rather than building real businesses.
Why would these people spit on a stock that's throwing off nice dividends?
> a company that became very successful, but never got bought or went public?
Option 3: Stay private, finish growing, throw off fat dividends until the cash cow dies.
What's the problem?