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Pros and cons: Companies Going Public

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Why do companies decide to sell stock in the public markets, and what are the pros and cons of going public?

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Solution Summary

This solution outlines the pros and cons of companies going public. It includes examples and a link, as well as an explanation as to why companies decide to sell stock in public market.

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The primary reason companies decide to go public is to raise capital. Typically, companies are started with funds from the founders and their friends/families. Going public comes when the company needs more funds to grow. It offers the founders a chance to gain back their initial investment by setting a fair market value, allowing them to cash out at some point. This can motivate key personnel. It also means that the founders have ...

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Sally Baldwin, Ed.D
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  • BA, University of Southern California
  • MSS, United States Sports Academy
  • Ed.D, Boise State University
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