TL;DR - Public companies have gone through IPO, can issue bonds, and must report quarterly earnings. Private companies can only raise money privately.
Helpfulness - 5
Topic Tags - public, private, IPO, bonds, SEC
- What is a public company?
- What is a private company?
- What is the difference between the two?
- How can each of them fundraise?
- Private companies are privately held, while public companies have had an IPO (initial public offering) and can be invested in through stocks, a form of equity.
- Large companies are normally public, but exceptions exist.
- Private companies can only rely on private funding, but “may still be able to sell a limited number of shares without registering with the SEC.”
- Public companies can fundraise by selling stocks or bonds.
- Public companies have to file quarterly earnings reports with the securities and exchange commission.
- Securities and Exchange Commission: https://www.investopedia.com/terms/s/sec.asp