[solatic]

When companies get large enough, they need to show that they are outperforming the market at large for their shareholders. If the company is only making a 1% return on its product, why not take that money and put it in the stock market instead of employee salaries and asset acquisition? Even startups deal with this issue - why should a VC fund take an enormous risk on your company when they can put it in the stock market and earn middling return that's still much better than a complete loss?

The main difference is that as a startup, you the CEO know everybody in your startup, you know your sole customers, you know the product intimately. This allows you to focus on the product and "secret sauce" that differentiates your company as an investment from the rest of the market. But when you're a CEO of a large public company, you have too many employees to count, too many products to count, and too many customers to count. Financial instruments become a necessary abstraction to help deal with all that complexity.