50 or 100 years ago, there was real risk inherent in being an equity underwriter. IPO underwriters purchase the equity from the issuer and resell it to the mark

50 or 100 years ago, there was real risk inherent in being an equity underwriter. IPO underwriters purchase the equity from the issuer and resell it to the market, and in theory that creates material risk that they might not be able to resell it at a profit. These days, they've pre-sold the equity (usually several times over) to institutional investors before they do the deal, so the risk is pretty minimal. Just look at the average first-day pop (something like 20%?) on large IPOs and you can see how little risk they're taking.