What are the advantages of a public company?

1. Ability to raise funds by selling stock One of the advantages that public companies enjoy is the ability to raise funds through the sale of the company’s stock to the public. Before becoming public, it is difficult to obtain large amounts of capital, other than through borrowing, to finance operations and new product offerings.

Why do private companies go public?

Private companies go public in order to generate capital to help further their growth, reduce debt, or fund other business operations. Going from a private company to a public one, known as an initial public offering (IPO), comes with both advantages and disadvantages and may not be the right move for every company.

What are the pros and cons of going public?

Here are some of the main pros and cons they have to consider. Raising capital is the most distinct advantage of going public. When companies go public, they sell shares of ownership to the public in exchange for cash. The raised capital can be used to fund research and development (R&D) and/or capital expenditure, or pay off existing debt.