What does it mean to go public?

Going public refers to a private company's initial public offering (IPO) and moving to a publicly traded and owned entity. Going public helps a company raise capital to invest in future operations, expansion, or acquisitions. The process may diversify ownership, impose restrictions on management, and open the company to regulatory constraints.

Why do companies go public?

Increased capital: Going public gives companies increased capital and liquidity to reinvest in the company’s growth. Higher market value: Companies often see their market value increase after going public because of the increased transparency and liquidity. But that is not true for every company that goes public.

What happens if a company goes public?

Loss of ownership and control: When a company goes public, it forfeits some of its ownership to the public. Even though the founder usually maintains at least 50% ownership, they still must answer to a board of directors and shareholders. Costs associated with going public: Going public can be a costly process.