Why Do Companies Go Public?
Answers:
When a private corporation has been operating successfully and needs more capital to expand or branch out into new directions, the owners may not be able to provide the amount of capital required. By going public, the company can gain access to many investors. The company stock will be sold in stock markets with a huge base of available capital, and if the company is attractive to investors, they will buy its stock. Other reasons for going public are to permit the original owners to dispose of some of their ownership so that they can diversify their investments. They may be holding a large part of their wealth in the stock of their private company, and they want to spread the risk of holding stocks by disposing of some of their investment in their company so that they can but stock of other companies. Some of the owners may want to retire and stop being involved with management. By going public they free up their capital for other purposes.
How do you reckon they'll get more money by staying private?? Companies generally go public to raise capital quickly. Look at Google!
And please, don't capitalize every word in a sentence. That's correct form in the title, but in the body it makes you look uneducated.
Going public is part of an entrepreneur's overall harvest strategy. They want big payoffs, and you get that with an IPO. All companies need to raise equity capital, because debt borrowing (i.e. borrow from a bank) is costly and not always available if you have a substandard credit rating, which is likely for nearly all startup firms.
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