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IPO Process
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Dutch Auction
An alternative IPO method where the price of the offering is set based on bids from investors to buy shares.
Due Diligence
The thorough investigation of the company's business, financials, and risks before going public or investing.
Venture Capital Rounds
Series of funding rounds (Series A, B, C, etc.) where venture capitalists invest in a growing company.
Red Herring Prospectus
A preliminary version of the prospectus that contains most details except for the price and number of shares offered.
Secondary Offering
The sale of new or closely held shares after an IPO, allowing company insiders and early investors to sell their shares.
IPO Allocation
The process of distributing shares among interested investors, typically managed by the underwriters.
Final Prospectus
The final and formal document submitted to the SEC and provided to investors, containing the IPO price and share details.
Earnings Calls
Regularly scheduled public conference calls where the publicly traded company discusses financial performance.
Analyst Coverage
After the quiet period ends, analysts from the underwriting firms start providing research coverage on the new public company.
Regulatory Filings
Periodic submission of financial and business updates to the SEC and the public, as mandated for public companies.
Securities and Exchange Commission (SEC) Review
The process where the SEC examines the registration statement for compliance with disclosure requirements.
Green Shoe Option
A clause allowing underwriters to buy up to an additional 15% of company shares at the IPO price to cover over-allotments.
Company Formation
The first step where founders establish a business with a potentially scalable model.
Underwriters Selection
Choosing investment banks that will guide the IPO process, market the shares and help determine the pricing.
IPO Syndicate
A group of investment banks that work together to manage the IPO and share the risks associated with underwriting.
Seed Financing
Early investment to fund initial operations, often from angel investors or friends and family.
Stock Exchange Listing
The company’s shares are officially listed on a stock exchange, enabling public trading.
Lock-Up Period
A period after the IPO during which insiders and early investors are prohibited from selling their shares.
Quiet Period
A mandated time frame after an IPO where promotional commentary by the company is limited by SEC rules.
Board of Directors Formation
Creation of a governing body that oversees the company’s management and is a requirement for going public.
Book Building
The process by which an underwriter attempts to determine the price to offer an IPO based on demand from institutional investors.
IPO Registration Statement
Filing of Form S-1 with the SEC which includes the company's financial statements, management background, and risks.
Pricing the IPO
Determining the final offer price per share based on investor interest, market conditions, and company value.
IPO Roadshow
A series of presentations by the company's management to potential investors to generate interest in the IPO.
IPO Launch
The first day the company's shares are available for trading on a stock exchange.
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