Wall Street can help take a business to the next level.
Most entrepreneurs have visions of being their own boss, working for themselves and determining their own paths to success. They come up with an idea, research and plan, launch their business and are content. If their business is a success, it will continue to grow, and finally there will come a point where the entrepreneur will have to decide "Do I take this company public?" While it seems like going public takes a company out of the hands of the people that started it, there are some significant benefits to doing so.
Raising Capital
If a business needs an injection of funds to expand or grow its operations, going public can provide a significant advantage in terms of finding investors or allowing the general public to purchase stock in the company. Using stock funds as cash can help companies grow without relinquishing control over day-to-day operations. Going public also makes the company more visible to potential investors.
Gaining Publicity
Going public can increase the public's awareness of the company and contribute to growth in sales. Public companies are perceived as more stable than their private counterparts, giving the general public a greater level of trust in the company's policies and products. This publicity can also lead to the company's ability to attract a higher-caliber employee to come work for them.
Build Value for Sale
If a company's strategy is to grow, with the plan to sell the business for a large sum of money, going public can help contribute to the overall value of the company. Initial investors who see a value in the company will invest in the stock, with the hope that their return on investment will be lucrative in the future. Often value is perceived, but going public helps foster the perception that a company is worth more than what its books might initially show.
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