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9.2. The IPO Due-Diligence Process ......................................................................................... 161
9.2.1 Who Does What ........................................................................................................... 163
9.2.2 The IPO Due-Diligence Checklist ............................................................................... 163
Organizational Items ................................................................................................................. 164
Licenses and Tax Items ............................................................................................................. 164
Company Employees and Board Information........................................................................... 164
Financial Items .......................................................................................................................... 164
Service and Customer Items ..................................................................................................... 165
Property Related Items .............................................................................................................. 165
10. Syndication ................................................................................................................166
10.1 An Overview of Underwriting Syndicates ................................................................... 166
10.2 The Syndicate Explained ............................................................................................. 167
10.2.1 Leader ....................................................................................................................... 169
10.2.2 How the Underwriting Syndicate Works .................................................................. 170
Price vs. Demand for IPO ......................................................................................................... 170
The Process of Determining the IPO Price ............................................................................... 170
10.3 Agreement between Underwriters ............................................................................... 170
11. Underwriting ..............................................................................................................171
11.1 The Underwriting Process ............................................................................................ 171
11.2 Types of Underwriting Commitments ......................................................................... 172
11.1.1 Best Efforts ............................................................................................................... 172
Understanding Best Efforts ....................................................................................................... 172
Example .................................................................................................................................... 173
Reasons for a Best-Efforts Offering ......................................................................................... 173
Important Additional Information on Best-Efforts ................................................................... 173
11.1.2 Firm ........................................................................................................................... 174
Understanding Firm Commitment ............................................................................................ 175
Example .................................................................................................................................... 175
11.1.3 Stand-By ................................................................................................................... 176
Understanding Stand-By Commitment ..................................................................................... 176
11.1.4 Best Efforts vs. Firm Commitment ........................................................................... 177
11.1.5 Standby vs. Firm Commitment ................................................................................. 177
11.1.6 Standby vs. Best Efforts ............................................................................................ 177
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