Once a company goes public and the price of its shares go up I guess some investment firms can make money that way. But how do investment firms that invest in non-public companies (e.g. small startups) make money? Do they just keep on investing until the company goes public and they can reap profits (through stock prices etc.)?
In: Economics
A company produces value, for example if that start up invents a new product, popular software etc. The company gets more value = shares going up.
Basically you can think of it as a pie. The pie gets cut into 10 pieces and being worth (at the time it was cut) $1, each piece is now $0.10 worth. However, a new ingredient gets added onto the pie, now each piece is worth $0.20 and so on.
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