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Asked by: Ewan Gotzsch
business and finance mergers and acquisitionsWhat do you mean by initial public offer?
Moreover, what is the IPO process?
An initial public offering (IPO) refers to theprocess of offering shares of a private corporation to thepublic in a new stock issuance. A company planning an IPOwill typically select an underwriter or underwriters. They willalso choose an exchange in which the shares will be issued andsubsequently traded publicly.
Subsequently, question is, what does going public mean?
Going public refers to a private company'sinitial public offering (IPO), thus becoming apublicly-traded and owned entity. Businesses usually gopublic to raise capital in hopes of expanding. Additionally,venture capitalists may use IPOs as an exit strategy (a way ofgetting out of their investment in a company).
Advantages of IPOs The primary benefit of going public viaan IPO is the ability to raise capital quickly by reaching alarge number of investors. A company can then use that cash tofurther the business, be it in the form of research,infrastructure, or expansion.