Final answer:
Entrepreneurs raise money by selling shares of stock, granting partial ownership to buyers. An IPO is a significant event for a company to acquire capital for repayment to early investors and expansion, while decision-making in a shareholder-owned company is often handled by a board of directors.
Step-by-step explanation:
To raise the money, entrepreneurs sold shares of stock, which are certificates granting partial ownership of a company. The sale of a company's stock to the public for the first time is known as an initial public offering (IPO). Through the IPO, along with any subsequent stock offerings, a company can gather financial capital to repay early investors, such as angel investors and venture capital firms, and to fund significant expansion endeavors. Companies can also sell bonds as a means to raise capital, which is a promise to repay a loan with interest without granting any ownership rights.
A company owned by multiple shareholders typically has a board of directors or executive management team that makes decisions on behalf of all shareholders. While the sale of stock does not guarantee a fixed rate of return to investors—the return comes from potential dividends and an increase in stock value—bondholders are promised a regular payment in the form of simple interest.