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As the financial markets and economy have recovered from the coronavirus-driven downturn in 2020, more private companies have been turning public. For employees at these companies, this can be a big financial windfall, but it also raises lots of questions for those not familiar with the process.
Complicating manners is that there isn't just one way for a company to go public: There are traditional initial public offerings, direct listings, and vehicles that have been in the headlines lately--special-purpose acquisition companies, otherwise known as SPACs. Each of these different avenues comes with a different set of dynamics around managing the shares of your company.
In this article I'll provide an overview of the different paths to becoming a company with publicly traded stock and the main questions you'll need to be aware of.
First the basics: