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The IPO Napkin: https://napkinfinance.com/napkin/what-is-ipo/
Transcript:
What is an IPO?
Initial public offering
When shares of a company are first sold to the public AKA “going public”
Why go public?
Raise cash
Attract awareness and interest
Gain credibility
Increase liquidity (easier to sell or convert ownership into cash)
Attract top talent
IPOs are highly anticipated for both investors, who see growth and want to invest and for the companies owners, who will get a payout for giving up a piece of the business
Private VS. public companies
Public company
Shares sold on exchange to outside investors
Stock traded on an exchange
Company financials are public
Must file withe SEC (the securities and exchange commission) and comply with regulations
Private company
Majority are owned by founders, family, or key employees
Stock not for sale to general public
Company financial information private
More flexibility and maneuverability with less regulation
How to get ready for an IPO
Hire a brokerage firm
Meet with investment banks
Secure top-notch talent for company and board
Meet with public investors to promote business to research analysts
Make sure financials projections are reasonable
Fun facts
Facebook initials IPO price was at $38 per share, but the stock fell as soon as ti opened and now it's worth over $100!
The largest IPO on record was Alibaba, which was valued at $25 billion in 2014
