Eli5: How does a private owned company benefit itself financially by going public?
In: Economics
The main reasons company go public are:
– Generate funds to invest in growth/expansion, especially if not yet profitable.
– Allow outside investors to realize their gains. A VC firm wants to pull their money out after a period of time so that they can invest in the next thing.
– Allows founders and other employees to make their wealth liquid. They want to turn private share value into Ferraris and SF lofts.
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