CHEN ZHIWU Economist Beijing

Besides raising more money, a public listing has plenty of other benefits for companies. The stock market provides entrepreneurs with a possibility for monetizing and pricing the expected income in the future. With this possibility, they can arrange their wealth more flexibly and set a long-term development strategy for the company. If the company does not go public, entrepreneurs cannot liquidate their stocks and the success of the company can only be assessed annually, rather than instant recognition.

After going public, the shareholder base will be expanded, which could diversify the company’s risk. It is also possible to introduce other major shareholders, or even develop in the direction of management by professionals, instead of just relying on descendants or other relatives of the founders to take over the company in the future. appreciation. In addition, going public will bring incremental capital and increase the confidence of potential financial institutions, and correspondingly lower borrowing and other financing costs. It also contributes to the establishment of a modern enterprise system and improvement in the corporate management structure.

For employees, if their shares have value, they will have greater motivation and will be more proactive. Various equity incentives such as stock options will make employees deepen their bond with the company. For investors, going public can allow them to share the fruits of enterprise development and realize capital appreciation.