Glossary
Definition
Private Company
A company whose shares are not available to the public on a stock exchange.
A private company does not have publicly traded shares. Its ownership is held by founders, employees, and private investors (angel investors, VC, PE funds). Private companies are not required to disclose financial information to the same extent as public companies. Valuations are less transparent and harder to verify, which makes estimating their owners' net worth more difficult.
Frequently Asked Questions
Can private company founders be billionaires?
Yes. A founder of a private company valued at $10 billion who owns 50% has a paper net worth of $5 billion. However, that wealth is illiquid until the company is sold or goes public.