The process of going public involves several steps:
Hire Investment Banks: Companies typically hire investment banks to serve as underwriters. These banks help to determine the IPO price, create the prospectus, and sell the shares to institutional and retail investors. Due Diligence and Regulatory Filings: Companies must undergo thorough due diligence and file the necessary documents with regulatory bodies, such as the Securities and Exchange Commission (SEC) in the United States. Roadshows: Conducting roadshows is crucial for generating interest among potential investors. During these events, the company's management presents the business model, financials, and growth prospects. Pricing: The final IPO price is determined based on investor demand and market conditions. This price is critical as it affects the company's valuation and the amount of capital raised. Launch: On the launch day, the company's shares are listed on a stock exchange, and trading begins. The company's stock price can fluctuate significantly based on market conditions and investor sentiment.