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Do IPOs usually generate new funding for the IPO company? IPOs seem serve as an `exit` for private investors who bought in while the company was private?
by hayksaakian 7y ago
Do IPOs usually generate new funding for the IPO company?
IPOs seem serve as an `exit` for private investors who bought in while the company was private?
- eigenvalue 7y agoThey do both. It's relatively rare for a company to IPO without raising fresh capital for the company. There are however often "secondary" share sales where only "selling shareholders" (rather than the company) receive the proceeds.
- deleted 7y ago[deleted]
- usrusr 7y ago> It's relatively rare for a company to IPO without raising fresh capital for the company. An IPO without raising new capital would make it more difficult to answer what every buyer should ask: "why are they so eager to sell?" It's a variation of plausible deniability.
- gmmeyer 7y agoIt's what Spotify did, I think it's a decent question but it also allows for liquidity, especially since it's such a big part of comp it's not unreasonable to list
- buzzdenver 7y agoAn IPO with out raising fresh capital is called a Direct Listing. Slack did it not long ago.