Every company has a different portion of their funding. There is a company who choose to get a financing more from external financing and there is a company who choose the other way, they choose more from internal financing. Internal financing is when company get their funding from their own profit, their own assets, it means that they use their own strength to running the business. But in the other hand external financing is when company needs more funding because their internal financing is not enough. External sources of finance implies the arrangement of capital or funds from sources outside the business.
When a company choose just only an internal financing then they are a private company. Going private is a transaction or a series of transactions that convert a publicly traded company into a private entity. Once a company goes private, its shareholders are no longer able to trade their stocks in the open market.
There are advantages and disadvantages from go public and go private. Going private, can make a management focus only to running and growing the business without thinking about regulations to comply with. So the management can focus on improving the business in the marketplace. Going public, make the management to also thinking about how to deal with regulations.
And this is why Dell in 2013 choose to going private. The company founder said that “We still have a long way to go and many challenges to meet. But under a new private company structure we will have the flexibility to accelerate our strategy and pursue organic and inorganic investment without the scrutiny, quarterly targets and other limitations of operating as a public company. Our 110,000 team members worldwide are 100 percent focused on our customers and aggressively executing our long-term strategy for their benefit.”
This statement described that the strategy for that company is to take an easy control when the company is still private, because when company go private then it means that there is a little intervention when the company wants to make a decision.