Here’s a move straight out of the relationship banking playbook: lend money to someone today so they’ll remember you when the real payday arrives tomorrow. That’s exactly what Wall Street’s private wealth divisions are doing with founders and early employees at the hottest AI and tech companies, extending loans backed by illiquid private stock in a calculated bet that these borrowers will become spectacularly wealthy clients once their companies go public.

The strategy is working, at least by the numbers. Goldman Sachs has seen its private wealth management loan balances in San Francisco jump 50% since 2023. JPMorgan has reported a tenfold surge in global demand for private bank lending in recent months. These aren’t random credit lines. They’re carefully placed chess pieces on a board that leads directly to the largest wave of US IPOs since 2021.

The loan-to-IPO pipeline

Founders and early employees at private companies often find themselves in an awkward financial position: wealthy on paper, cash-poor in practice. Their net worth is locked up in shares they can’t easily sell. Meanwhile, mortgages need paying, tax bills come due, and stock options need to be exercised before they expire.

Banks are extending credit against those illiquid shares using structures like short-term unsecured loans and share-pledge facilities. The founder gets liquidity without giving up equity. The bank gets a relationship that positions it to win underwriting mandates and wealth management business when the company goes public.

Morgan Stanley demonstrated exactly how lucrative this can be, generating over $70 billion in net new assets from IPOs in Q2 2026 alone, primarily driven by SpaceX.

A historic IPO window

US IPO activity in 2026 has been nothing short of extraordinary. Listings excluding SPACs and financial vehicles have raised approximately $230 billion year-to-date, figures not seen since the frothy markets of 2021.

SpaceX’s anticipated $75 billion IPO, launched in June, has been the headline grabber. Anthropic, now valued at a staggering $965 billion, may pursue an IPO as soon as October 2026. OpenAI has already confidentially filed for its own public listing.

Law firm Addleshaw Goddard has seen its stock-backed lending deals double between December 2025 and July 2026, a signal that the infrastructure supporting these transactions is scaling rapidly across the financial ecosystem.

The crypto angle matters more than you think

The broader dynamic of share-backed lending mirrors what decentralized finance has been doing for years, allowing holders of volatile or illiquid assets to borrow against them without selling. The difference is that Wall Street is doing it with private equity stakes instead of ETH or BTC.

The flood of AI IPO capital also has direct implications for crypto markets. When $230 billion flows into new tech listings, that’s capital competing with digital assets for allocation in portfolios.

There’s also the precedent this sets for tokenized equity and on-chain lending. Traditional finance is essentially recreating, in bespoke and expensive form, what protocols like Aave and Compound do programmatically. If private stock could be tokenized and used as collateral in DeFi protocols, the efficiency gains would be enormous. Some startups are already working on exactly this.

What investors should watch

The risk embedded in this lending boom deserves attention. Banks are extending credit against assets with no public market, no daily pricing, and limited liquidity. If the IPO window closes unexpectedly, whether due to a macro shock, regulatory change, or simple market fatigue, those loans become significantly harder to value and potentially harder to recover.

In 2022, when tech valuations cratered, share-backed loans to founders became problematic across several institutions. The concentration of lending in AI companies introduces sector-specific risk that shouldn’t be ignored.