IPO (Initial Public Offering)
The process of a private company selling shares to the public for the first time and listing on a stock exchange.
An IPO is when a company sells newly issued shares to public investors for the first time, typically through underwriting investment banks that market the deal, set the offering price, and facilitate the exchange listing. It converts private venture-backed equity into publicly tradable stock and provides the company's first major liquidity event for founders, employees, and early investors, subject to a lockup period.
The traditional IPO process includes a roadshow (management presenting to institutional investors), a priced offering the night before trading begins, and a first day of trading where the stock finds its real market price, which can differ meaningfully from the IPO price. Companies going public also take on substantially heavier ongoing disclosure, governance, and compliance obligations than as a private company.
Prepare for the operational and cultural shift of being public at least a year before filing — quarterly earnings pressure, public scrutiny of every metric, and stricter governance requirements change how a company operates in ways many founders underestimate until they're living it.
How long is the typical IPO lockup period?
Commonly 180 days, during which insiders (founders, employees, early investors) are contractually restricted from selling shares, though some deals have used shorter or staggered lockup structures.
Related terms
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