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Selling shares of stock to investors is a common way that companies attract capital that they can use to fund new projects and growth. An initial public offering, or IPO, is a company's first sale of stock to the public. When a company files for an IPO, it plans on selling stock to the public, which means the company goes from being privately owned to being publicly owned.
Other benefits of going public: Once the company has gone public, additional equities may be easily sold to raise capital. A publicly-traded company with stock that has performed successfully will usually find it easier to borrow money, and at a more favorable rate, when additional capital is needed. A publicly-traded company may also have more leverage in negotiating with vendors, and it may be more attractive to customers.