Entrepreneurship: What are private and public companies?

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An entrepreneur is someone who recognises a need and starts a new venture. When starting out, the entrepreneur will need some materials, a place to work, and some other important ingredients to make the venture succeed. Here we take a look at what this journey looks like for some, and what the difference is between privately owned versus publicly traded companies.

What if Krish and Anya decide to take slime-making to a new level, and decide to open a business called Slime-O-Rama. Each of them share the costs of the ingredients, and figure out where they can make it. Each of them owns 50% of Slime-O-Rama. Let’s carry this example forward:

 

 

 

 

 

 

 

 

 

 

 

 

Good news! There is demand from other neighbourhoods! Other kids love the squishy, jiggly stuff! Krish and Anya will need to ‘invest’ more money into making buckets more, and can also advertise so that more kids get to know of their product.

 

 

 

 

 

 

 

 

 

 

 

 

They will need to raise or collect some money in order to afford more ingredients, boxes, and advertising materials. Where can they get this money from?

 

 

 

 

 

 

 

 

 

 

 

What if demand is so high that even kids in other countries want this slime that Krish and Anya make so well? They might need to raise some more money. They can explore ‘going public’.

 

 

 

 

 

 

 

 

 

 

 

 

Fantastic! Looks like Slime-O-Rama is a success, Krish, Anya and their investors can realise the fruits of their labour and sell a piece of the company to be traded on the stock market.

There are successful private and publicly traded companies in the world. How does one pick what kind one is? It depends on how much money you can put into your venture and how much control you want to have over the company.


Written by: Sunaina Murthy. Sunaina is a biotechnologist, writer, greedy reader, and amateur photographer.

Illustrated by: Sohail Panjwani

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