Before the 2012 JOBS Act, a US company generally had to register with the SEC if, at its fiscal year-end, it had:
* 500 or more shareholders
* More than $10 million in total assets.
Employees who owned shares counted toward that threshold, which made it particularly relevant to startups that paid employees partly in stock.
The requirement was to become a public *reporting* company, publishing financial statements and other SEC disclosures. It did not require an IPO or a stock-exchange listing, but it encouraged an IPO.
IIRC when you hit the threshold you got reporting requirements similar to if you were public, at which point why not just become public since the info's out there already and you can't be as secretive anymore?
Thanks, Obama!