• An initial public offering (IPO) refers to the process of offering shares of a private corporation to the public as part of a new share issue.
  • Companies must meet the requirements of exchanges and the Securities and Exchange Commission (SEC) to conduct an IPO.
  • IPOs provide companies with the opportunity to raise capital by placing shares in the primary market.
  • Companies hire investment banks to enter the market, assess demand, set IPO price and date, and more.
  • An IPO can be seen as an exit strategy for the company’s founders and early investors making full returns on their private investments.