Is it possible to make money off of a private company?
Yes, but only if they're looking for investors. You would need to contact them directly. Unless you're looking to invest a significant sum, they may not be interested in speaking with you. (Think at least 6 figures, maybe 7 depending on their size and needs). This is otherwise known as being a Venture Capitalist. Some companies don't want additional investors because the capital isn't yet needed and they don't want to give up shares in the profit/control. Alternatively, you could try and figure out which investment groups already have a stake in the company you're interested in. If those companies are publicly traded, you could buy stocks for their company with the expectation that their stock price will increase if the company you know of does well in the long run. Another way to do this is go to work for that company.  Companies in this situation normally offer low pay, long hours, and stock options.  Given a sufficient grant, it could be all very lucrative or worthless.   Even if you have no electronics background you might be able to work in a different capacity.  There were secretaries at various companies that became wealthy off of their stock options.
"The basic theoretical reason for a company to return money to shareholders is that the company doesn't need the money for its own purposes (e.g. investment or working capital). So instead of the company just keeping it in the bank, it hands it back so that shareholders can do what they think fit, e.g. investing it elsewhere. In some cases, particularly ""private equity"" deals, you see companies actively borrowing money to payout to shareholders, on the grounds that they can do so cheaply enough that it will improve overall shareholder returns. The trade-off with this kind of ""leveraging up"" is that it usually makes the business more risky and every so often you see it go wrong, e.g. after an economic downturn. It may still be a rational thing to do, but I'd look at that kind of proposal very carefully. In this case I think things are quite different: the company has sold a valuable asset and has spare cash. It's already going to use some of the money to reduce debt so it doesn't seem like the company is becoming more risky. Overall if the management is recommending it, I would support it. As you say, the share consolidation seems like just a technical measure and you might as well also support that. I think they want to make their share price seem stable over time to people who are looking at it casually and won't be aware of the payout - otherwise it'd suddenly drop by 60p and might give the impression the company had some bad news. The plan is to essentially cancel one share worth ~960p for every payout they make on 16 shares - since 16x60p = 960p payout this should leave the share price broadly unchanged." No, but insider information would have tipped them off on the timings of when to time some of their actions... possibly planning shorting it ahead, all kinds of who-diggery that those financial wizards can do to make shit tons of money off stocks / companies losing money. "&gt; can I use venture like that in a financial context, or does it refer specifically to venture capital?  Yes, any business is a ""venture"" so to speak.   &gt; so they would receive a smaller return, yes?  POSSIBLY yes.  Mezzanine investors are, well, ""middle"" investors. They're beyond seed and venture capital, but before more ""late-stage"" private investment. That doesn't *necessarily* mean they're ""after a seed or venture capital investment."" It can mean that, or it can simply mean the business is a little more advanced than a pure idea, or pre-revenue, etc.  Let's say a company is pre-destined to get to $100m in value IF it can secure funding. Naturally, later investors will have a smaller return. Of course, private investments are generally for smaller, younger companies, and thus are more risky, so an investor can still *lose* value in a private equity investment.  &gt; Is mezzanine investing particularly profitable?  Yes, absolutely. You have to understand, with investments in private equity, firms and individuals are often looking for a *multiple* of their investment (i.e. if an investor invests $1m, they expect $2m, $3m, etc. back). This is not necessarily for all levels of private equity, but many levels will attempt this. Generally the idea (as far as I'm aware) is a 20% IRR (which means that generally, the investment grows by 20% *compounding* yearly).   &gt; Secondly, why is dilution so important further down the road? Is it to do with valuation?  Absolutely. Let's think of our example earlier, where you, me, and Joe each own 33% at $300 total value.  If suddenly another company wants to buy ALL of our equity for $600, then we're all pretty happy. Each of us will get $200. HOWEVER, let's say Joe hadn't come along. If that other company *then* made an offer for $600, we'd both get *$300* for the company.   There's some other things about dilution too, such as the possible loss of control, but we'll save that for later.  &gt; Finally, at what point would a company aim to meet an IPO? Is it case specific, or is there a general understanding of the ""best time""?  It's VERY case specific. In *most* cases, depending on the industry, the company will be relatively a bit older, have both revenue and profitability, and a history of operations. In some cases, companies like this will choose to *never* go IPO (such as the Big 4 auditing firms, for one, among others).   There are, of course, exceptions. Many smaller pharmacueticals are *pre-revenue* and are traded on the market. Tesla is getting revenue, but *not profitable* and it's on the markets as well. These are, naturally, riskier investments, but at least you've got liquidity to help a bit with that.   When a private equity (PE) firm is looking to exit (sell their stake) through an IPO, they will try to engineer the company to be as attractive as possible to public investors. In fact, many PE firms will stipulate specific terms, and possibly get control of the company from the owner, when they initially invest. But there's a lot that goes into it. Perhaps /u/wreckingcru or /u/Seraphinic can go into a bit more detail on PE exits as while it's my chief interest and my career goal, it's not quite where I'm at *yet.*" "In addition to tax-related benefits, one answer may be that it helps them avoid being inundated with requests to support other foundations. Most charities have access to public records that indicate potential donors based on income and demographic. They can use that info to solicit for donations. ""Hey NFL Player, you have lots of money, and we have cute starving emus that really need your help!"" Here's a blurb from Foundation Source about some of the benefits to starting your own foundation.  Get an Immediate Tax Deduction, but Give Later: You get the tax deduction when the foundation is funded, then make your charitable   gifts over time. Leave a Lasting Legacy: Foundations set up in perpetuity can burnish your name far beyond your lifetime. Because gifts are made   from an endowment that generates investment revenue, the total gifts   made by the foundation can far surpass the actual funding. Be Taken More Seriously as a Philanthropist: A foundation imparts a gravitas that causes people to take your philanthropy more seriously,   due to the structured, organized approach you employ for your giving. Sidestep Unsolicited Requests: When you focus your foundation on specific giving areas, your mission statement can be used to politely   turn down off-target funding requests. Deepen and Focus Your Philanthropy: Whereas individual donors often spread their giving among as many causes as possible, the formalized   structure of a foundation often encourages donors to narrow their   focus to specific causes. Build a Better Family: As family members take on philanthropic research, present their findings to the board, participate in the   decision-making process, and track results, they hone skills that will   serve them for years to come. Tax-Deductible Grants to Individuals in Need: A private foundation allows you to provide emergency assistance directly to individuals   using dollars for which you’ve already received a tax deduction. Run Charitable Programs Without Setting Up a Separate Nonprofit: Direct charitable activities are IRS-approved programs that permit   foundations to directly fund and carry out their own projects. Pay Charitable Expenses: All legitimate and reasonable expenses incurred in carrying out the foundation’s charitable mission can be   paid by the foundation and will count toward the annual minimum   distribution requirement. Provide Loans Instead of Grants: When used to support a charitable purpose, private foundations can employ loans, loan guarantees, and   even equity investments, which are paid back (potentially with   interest), so you can recycle your philanthropic capital for other   charitable causes. https://www.foundationsource.com/resources/library/top-10-advantages-of-a-private-foundation/ There's a similar list here on the website for an attorney that specializes in philanthropy and non-profits. I won't copy/paste that list as it's similar, but I wanted to provide an additional source confirming the above benefits. This link contains some disadvantages as well.  http://www.hurwitassociates.com/l_start_pros.php" "This information is clearly ""material"" (large impact) and ""non-public"" according to the statement of the problem.  Also, decisions like United States v. Carpenter make it clear that you do not need to be a member of the company to do illegal insider trading on its stock. Importantly though, stackexchange is not a place for legal advice and this answer should not be construed as such.  Legal/compliance at Company A would be a good place to start asking questions." Firstly it is completely legal for a company to buy its own shares, I don't believe it would be legal to do so secretly. It would also be very difficult to do that secretly.   So hypothetically we have a company Johnbbob Inc. It doesn't have any assets other than $100 in a bank account and there are 100 shares each owned by a different person. Each share would be worth $1. So the company decides to buy one share. Now there is $99 in the account and 99 shares, each share is still worth $1. So the company continues to buy shares until there is only one share left and $1 in the account. If the company buys that last share it will no longer have any assets and will cease to exist, effectively dissolving the company.  TL:DR it is called dissolving the company or dissolution and it happens fairly often with limited liability corporations. I think his conclusions apply only to sole proprietorships that provide cheap, commoditized services.  My story is a little different.  I've been a sole proprietor, writing software and providing services related to that software, for 15 years.  Over that time, I closed two IP sales to large competitors.  One of those was an 8-figure deal.  I never provided commodity services, saved as much of my consulting income as possible, toughed out the fallow periods, invested years of unpaid time inventing new ideas and writing new software, treated my customers very well, and always negotiated hard for value. All Companies Can Take Advantage of [Local Business Listing](http://come2ourdeals.com.au/) .First of all, a company is not a enterprise. While we will discuss this in more details later on, we have to keep in mind that nation wide businesses with regional lifetime are also reliant upon the regional financial system for their income.