Eli5: How does a private owned company benefit itself financially by going public?

Question

Eli5: How does a private owned company benefit itself financially by going public?

In: Economics

Answer 1

Going public is fundamtaly inviting other people to invest in you company. That is often a good way to get money to expand the companies operation and gow even larger. Other way to ways money like borrowing money might not be available to you because banks might not belive that you could pay back the money.

For companies that in part is founded by venture capitalist is can be a way to exit from the company and get money back. hopefully a lot more then you invested. It is not that different from selling the company to another company, it is selling the company lost of people, companies, etc

[https://www.investopedia.com/ask/answers/advantages-disadvantages-company-going-public/](https://www.investopedia.com/ask/answers/advantages-disadvantages-company-going-public/)