Learn how companies go public and how investors value them.
An Initial Public Offering (IPO) is the first time a private company sells shares to the public to raise capital. This allows everyday investors to buy ownership and helps the company fund growth, pay debt, and gain prestige.
To go public, a company first files financial disclosures with the Securities & Exchange Commission (SEC), then works with investment banks to set the terms for the offering. It conducts an IPO roadshow, in which the company pitches the business to large investors to build demand. Based on received feedback, the company sets a share price and officially lists on an exchange like the NYSE or NASDAQ. Once trading begins, anyone can buy or sell the stock on the open market.
Small-cap (< $2B) - Riskier, high growth
Mid-cap ($2B-$10B) - Balanced risk/growth
Large-cap (> $10B) - Stable, established
