[chocolatebunny]

The purpose of an IPO is to raise money to do something. It doesn't make any sense to sell part of your company to a random set of people, just to pay them back over time. That's like me getting a mortgage for my house and after 30 years I pay back the mortgage and the bank still gets to own my house.

[TheKarateKid]

That’s what it’s original intent was, but an IPO is now a way for all the investors to earn a return on their private investment and cash out at any time moving forward.

In all fairness, private investment was much lower when this was the case. Companies used to do an IPO much earlier when they needed funding instead of raising hundreds of millions in private investment money.

[jartelt]

I believe the point is that you if you don't need to raise any money, you can do a direct listing instead of an IPO. Then you allow investor liquidity without selling equity.

[rrss]

> It doesn't make any sense to sell part of your company to a random set of people, just to pay them back over time.

It's unfortunate that this doesn't make sense to you, because that it literally the original purpose of shares in a company.

Someone wants to finance a voyage to a far-off land to trade. To do so, they form a company and issue shares of the company. The profits off the voyage (if any) are then divided amongst the shareholders, in proportion to shares held. It was a pretty good idea.

(Debt is not the same as equity, not sure why you are talking about mortgages).

[mstibbard]

That's exactly it's purpose though. If you only want a loan you would be raising debt (i.e. corporate bonds) rather than selling equity.