Public and Private Companies

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Holloway Guide ToEquity Compensation
Common questions covered here
What is the difference between public and private companies?
What does it mean to be a public company?
Are most startups private companies or public companies?

Public and Private Companies

Definition Public companies are corporations in which any member of the public can own stock. People can buy and sell the stock for cash on public stock exchanges. The value of a company’s shares is the value displayed in the stock market reports, so shareholders know how much their stock is worth.

Definition Most smaller companies, including all startups, are private companies with owners who control how those companies operate. Unlike a public company, where anyone is able to buy and sell stock, owners of a private company control who is able to buy and sell stock. There may be few or no transactions, or they may not be publicly known.

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