Page 112 - Initial Public Offering - An Introduction to IPO on Wall Street

5. Process
Now that we have an understanding of IPO, the disclosure needed for it, and the requirements
for getting listed, we can finally move onto the IPO process or the steps for getting listed as a
publicly-traded company.

The IPO process is the initial sale to the public of securities or shares that the business makes
available to buy. Of course, an organization is private before going public and is managed by
owners and investors.

Although the time needed to finish the IPO process differs from business to business, the
minimum time needed to prepare the relevant documents and complete the required steps is
approximately six months.
5.1 Why Go Through the IPO Process to Get Listed
Since the IPO process can be both time-consuming and expensive, you would need to have a
solid reason for going through it. The following are some of the most common reasons
companies go through the IPO process to become publicly traded entities.

5.1.1 Raising Capital
The first and foremost reason a company would want to go through the IPO process is to raise
capital for different projects or business ventures. The capital raised through the sale of stocks
could aid acquisition ambitions, expansion efforts, existing debt repayments, and more.

5.1.2 Providing Existing Investors with an Exit
There is a possibility of current investors wanting to sell their shares at some stage in the future
whether the company is owned by a few select people, backed by venture capital, and run by
private equity.

5.1.2 Gaining an Acquisition Currency
It is hard to quantify the value of the stock of most private firms, but once the firm is public, it
becomes easier to make acquisitions utilizing stock. Moreover, it is simpler for public
corporations to raise additional equity and debt.

5.1.3 Reward and Attract Employees

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