A private company can become public by selling shares to the general public for the first time. That process is an initial public offering, or IPO. Investment banks underwrite the offering, help set the price, and market the shares to institutional and retail investors. After the IPO the company’s shares trade on a stock exchange and the firm becomes subject to public reporting requirements.

Reasons for going public include raising capital for growth, providing liquidity for early investors and employees, and increasing visibility and prestige. The process is expensive and time-consuming, involving extensive disclosure, regulatory review, and road shows. Market conditions heavily influence timing and valuation.

Once public, the company faces continuous scrutiny from analysts, shareholders, and regulators. Short-term stock-price movements can create pressure that private companies do not experience. For founders and early backers an IPO is often both a milestone of success and the beginning of a new set of responsibilities to a broader ownership base.