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Comment by tomkin | Hacker News Reader

I'm incredibly ignorant when it comes to the stock market. But why would any company elect to go public? Let's see: you lose your creative edge 90% of the time, you destroy the relationships with your users 50% of the time, your team vision becomes one that must equate to profits - forever. This is not natural - to be constantly growing and profiting. Small businesses (you know, the millions of them) seem to hold their ground better in turbulent times, despite their lack of hand-over-fist profits.

This idea of unlimited growth is unsustainable and people who can't see that are just as bad as a 2008-era stock broker as far as I can see. It's a very willing and eager group of apologists and utopian dreams. Honestly.

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You get to turn pieces of paper which say "I own x% of TWTR" into pieces of paper which say "I own $y". A lot of people are happy to make that trade, especially if they don't think their ownership of the company is worth the amount of money that people are willing to pay for it.

As for the people who actually just work at Twitter, or who run Twitter? Well, you certainly get a lot more money to work with so long as your stock price doesn't collapse. You no longer have to go lobby certain individuals for money as much as you used to. Sure, you have to focus on making profits now, but that was always kind of the point, right? That doesn't mean you have to be short-sighted. Just look at a company like Amazon for an example of how a patient company can still command a high stock price and respect even when they're not pumping out huge profits.

Also, the vast majority of small businesses are abject failures. Most economic growth occurs through the activity of massive corporations (from the business side of things).

At least, that's my understanding. Feel free to point out if I'm full of shit, please.

Actual, a lot of economic activity comes from small businesses: about half the US GDP is generated from companies with less than 500 employees.

http://en.wikipedia.org/wiki/Small_business#Contribution_to_...

Interesting - although it's worth pointing out that it's about half of private sector GDP, not half of US GDP. Also, I'm not sure I'd call a business with over 100 employees "small", but I guess that's the definition they're going with.

Here's the full PDF of that source: http://www.sba.gov/sites/default/files/FAQ_Sept_2012.pdf

Also, while they're a government agency and cite their sources, their job is to advocate for small businesses. Does anyone else have more sources to look at?

Because that's how all of the original investors cash out. They originally purchased shares in the company to invest in it. The original investment went to the company itself. For argument sake, let's say they purchased those shares originally for $5 each. Now that the company is public, they can sell those shares on the open market for $45 each. The IPO is a combination of the company selling more shares to shore up its cash on hand, and for original investors to be able to sell their shares at a profit.

All of the money-related reasons others have talked about are valid, but there are also some legal reasons where you have to go public (such as a certain number of shareholders, which comes into play when companies give stock options as compensation). Facebook would still be private if they legally could have delayed any longer, I believe. You are entirely right that there are huge advantages to being private in a lot of cases.

You go public to raise a large amount of capital. No venture investor is going to give you billions of dollars.

For instance, Twitter just raised 1.8 billion in CASH. Presumably this is for them to scale up their operations. This is why public markets exist, and this is why companies go public.

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