I think eventually going public seems like a slam dunk to a lot of founders at the early stages of their companies. But what many tend not to think about is the extremely hard time that a number of startups have had after going public. FitBit and GoPro, for instance, have seen their valuations plummet. What are some of the advantages of going public?
Going public is considered a "liquidity event". That means that the founders/owners/investors have essentially "sold the company" by going public and have put money in their personal bank accounts. However, the event also means that the company now has capital to invest in future growth. Many times, a company has a good idea or a good product, but the process of growing the company is slow due to a lack of capital. So, the advantage to going public is an infusion of a great deal of cash (with the side benefit that equity holders can cash out).
It's an opportunity for the founders and other shareholders to cash out. You could pay dividends but that's not the same or tax advantageous for many. It is also an opportunity in some cases to tap further capital and investment cost effectively. Further it allows one to de-risk your personal exposure as if the business does flounder you don't lose everything - the risk is transferred to the market (obviously less any retained ownership).
It should be long term decision. Think about how much capital you will need to get your product to market or to scale the business. If a lot of money is going to be needed in the long run, then going public may be the route. You raise your funds through public offerings. The problem with the initial offering is that they sometimes are over optimistic. Once you are public there is a lot of regulation and reporting requirements and your share price is a bit out of your control.