This is all wildly simplified, but in general, people who own companies don’t make a salary; they make a profit. Once all expenses are paid, the leftover revenue is called profit, and goes to owner. This ownership can be sold in whole or in part to other people with money, in order to raise more money, which can be used to invest in equipment and such. Many ventures have significant startup costs, which means they require money before they can start making money, so they seek investment.
The people who invest in ventures do so in exchange for ownership of that venture, in the form of stock. They can make some money owning the company, but no one would do this if they were stuck with that stock forever, because then they would be illiquid, i.e. they would never be able to access that money again. People want to be able to sell their stock for more than they bought it, which means the stock’s value must grow or the company’s owners will be angry and fire its CEO.
This is all wildly simplified, but in general, people who own companies don’t make a salary; they make a profit. Once all expenses are paid, the leftover revenue is called profit, and goes to owner. This ownership can be sold in whole or in part to other people with money, in order to raise more money, which can be used to invest in equipment and such. Many ventures have significant startup costs, which means they require money before they can start making money, so they seek investment.
The people who invest in ventures do so in exchange for ownership of that venture, in the form of stock. No one would do that if they were stuck with that stock forever, because then they would be illiquid, i.e. they would never be able to access that money again. People want to be able to sell their stock for more than they bought it, which means the stock’s value must grow or the company’s owners will be angry and fire its CEO.
Because capitalism is a competition, if you don’t grow your corp, other corps will gobble you up. You HAVE to grow, at any cost, or you lose the game and someone else gets your points.
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