First, the funds raised cannot be taken for nothing. China's regulations on A shares are that if the total share capital of a listed company is less than 400 million shares at the time of IPO, it must issue at least 25% public shares; More than 400 million shares, at least issued 10%. In other words, if the major shareholder holds 60% of the shares before listing, it will be diluted by at least 25% or 10% after IPO, depending on the size of the total share capital.
Second, the word "listing" has great magic for many people. In order to develop better, many enterprises can have more funds for research and development, and their operations will choose to go public. The founders of many enterprises take listing as their goal. Generally speaking, the proportion of shares issued after listing is 25%, that is to say, the shares issued account for 25% of the total number of shares issued after listing. For example, the share capital before listing was 75 million shares, and 25 million shares were issued when listing, so the total share capital after listing became 654.38 billion shares, accounting for 25% of the newly issued shares.
Third, because of the dilution of equity, a big difference between a company going public or not is financing. After the company goes public, issuing shares can help the company raise funds, but it is impossible to sell its own shares through financing, because if shareholders sell their own shares, the money they get does not belong to the company, but to the shareholders themselves. Therefore, the first thing a company does after going public is to make a public offering. Here, we can regard it as additional shares of the company, which is what we usually call new shares, adding hundreds of millions of shares on the basis of the original shares, and then putting these new shares on the market and selling them to others at the subscription price. After the transaction, shareholders get shares and the company gets funds. Therefore, although the proportion of original shareholders has decreased, its own shares have not changed, but the overall base of shares has changed.
Financing is enterprise financing. The enterprise introduces the funds of external investors to become a large company, and the investors acquire part of the company's equity and become the new shareholders of the company (that is, "increasing capital and shares"). The essence of the founder's transfer of the company's equity in his own hands is the cash-out of shareholders, and the income from the equity transfer belongs to the individual shareholders rather than the company, unless the shareholders reinvest the transfer income as new registered capital, which will lead to the change of the company's equity structure, similar to the financing effect. When financing, the registered capital of the enterprise increases, and the tax cost of the original shareholders' equity remains unchanged; When the equity is transferred, the registered capital of the enterprise remains unchanged, and the taxable cost of the original shareholders' equity is adjusted.