This article analyzes some of the criticisms made by analysts in connection with the use of IPO studies for the purpose of estimating discounts for lack of marketability applicable to equity transactions in private companies. A simple model is presented that shows that the discounts observed in such studies may underestimate the true marketability discount, as the price discount required by investors will fall with the likelihood of a successful IPO. The model suggests a bias in the opposite direction of that commonly mentioned, where the observed discount is likely to be an overestimate of the true marketability discount. The conclusion reached is that the overall direction of bias is unclear, and that information that is not easily observed would be required to adjust the observed discounts to reflect the true marketability discount.