Kliuless #23: Company Strategy & Ownership Model

Being public allows a business to access the resources of outside investors. But that comes at the cost of giving up control over key decisions (including how success is defined), as well as submitting to the rules that are designed to protect outside shareholders. The term 'going public' literally means that a company is opening up to the scrutiny and regulation that accompany broad-based shareholding

The private model allows companies to exert more control over their destiny, and many are truly private in the sense of being under the radar. That freedom of action, though, comes at the cost of being reliant on the capital the owners can generate through their own resources or what they can convince others to lend them

Hybrids are in between these trade-offs. For example, Tesla has been able to use public equity to scale up its production while allowing founder Elon Musk to effectively retain control. However, Tesla is not immune to market pressures. Musk made headlines when he expressed his frustration with the pressures of being a public company and his desire to take Tesla private"