卫生间品牌大全排行榜 Private Companies vs. Public Companies

Last Updated: several months ago

We updated this piece to improve readability and to add increased emphasis on the advantages and disadvantages of hing a private or public company.

Need to know the difference between public companies and private companies? Well, in a nutshell, a public company is one that’s traded on the stock market, while a private company isn’t.

Of course, there’s more to it than that. So in this guide, we’ll explain the big differences between private companies and public companies―and we’ll tell you why you’d want your business to choose one path over the other.

Public vs. private feature comparison

Before we get into the implications of being a private company or a public company, let’s make sure you understand the core definitions of each.

Public vs. private companies FeaturePublic companyPrivate company

Emphasis

Raising funding

Maintaining control

Funding sources

Selling stock shares and bonds

Private investors

Completed IPO?

Who can buy shares?

Anyone

Limited private investors

Registered with the SEC?

Financial disclosures required?

Company size

Large

Large or small

Public companies

A public company sells company stock on the stock market. That means that the general public can buy shares, and therefore partial ownership, of the company. Because these shares get bought, sold, and traded on the stock market, you may also see a public company referred to as a publicly traded company. It’s the same thing.

In order to sell shares on the stock market, a public company must first he what’s called an initial public offering, more commonly called an IPO. That just means that it’s the first time that investors from the general public can buy company shares on the stock exchange.

Who goes public?

A company will need to earn north of $10 million before it can qualify for popular US stock exchanges. Sound steep? It is. But think of it this way: why would the public invest in stocks of companies that hen’t proven they he what it takes to be profitable? They wouldn’t.

That said, companies can technically go public with $0 of revenue through less visible channels, but this is probably not the smartest idea for a smaller company.

Private companies

A private company is owned by founders and private investors. It doesn’t sell stock on the public market. Instead, all ownership is held by those founders and private investors (and sometimes a few other types of individuals)―which is why you might hear a private company called a privately held company.

As you can probably guess, that means that a private corporation usually won’t he had an IPO. (In some cases, a public company can choose to go private again.) Instead, it will stick to private fundraising, often through venture capital.