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This paper provides a simple model of entrepreneurial firms' exit choices between IPOs and selling off to private equity firms. The entrepreneur trades off the benefits of private control, which are lost when the firm is sold to private equity firms, and the cost of going public. Investors in the economy can invest either in public stock market or in a private equity firm. Their tradeoff is between the cost of illiquidity of investing in the private equity firm, and the gains from the privatedoi:10.2139/ssrn.2132003 fatcat:kzz7shs33bdsjphyvmgg7wt6xe