The underwriter guarantees that the company will raise a certain amount of capital, by agreeing to take up the shares themselves if nobody else does, in exchang

The underwriter guarantees that the company will raise a certain amount of capital, by agreeing to take up the shares themselves if nobody else does, in exchange for a cut. https://en.wikipedia.org/wiki/Underwriting#Securities_underwriting https://en.wikipedia.org/wiki/Underwriting#Securities_underw...