Drawbacks Of Going Public

This question tests whether candidates understand the tradeoffs of equity financing through an IPO, not just the benefits. In an investment banking interview, you may be expected to explain how public ownership changes the relationship between management, shareholders, and the market, including issues like reduced control, greater disclosure obligations, and increased pressure to meet short-term expectations. Interviewers ask this because they want to see that you can think beyond valuation and capital raising, and assess how a strategic financing decision affects governance, reporting, and management incentives.