I understand how they potentially benefit the individuals who buy them, but what do companies get out of selling them besides a little money just selling them?
In: Economics
Not a little money, a lot of money. Businesses sell stock to create a huge infusion of cash—potentially billions of dollars. If you start a successful company, you can pay yourself a good salary and then hope that when you’re ready to retire the business can be sold to someone else. If you take the company public, you cash-out part of the value that you have created right away. That cash can then go into the founders’ pockets, be put back into the company to grow it more, or be used by founders to start a new company.
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