Many entrepreneurs and investors share the dream that, one day, they will ring the opening bell at the New York Stock Exchange NYSE and thereby mark the Initial Public Offering (IPO) of their company. However, raising equity from public investors is easier said than done. The purpose of our new module "Initial Public Offerings (IPOs)" is to take a closer look at public equity financing and the various ways available to firms to tap into this source of financing.
The key topics that we discuss in the module are:
Why do firms go public? Key costs and benefits of going and being public.
How do firms go public? Detailed overview of the traditional IPO process using an underwriting syndicate of investment banks. Practical application using recent cases, including the IPO of Dropbox earlier this year.
How does an IPO affect the value allocation and ownership of the firm? A simple model that highlights the financial mechanics of an IPO, with a detailed analysis of the cost, value, and ownership implications of the transaction.
What alternatives are out there? A discussion of alternative ways to tap into public equity, including direct listings, direct public offerings, crowd financing, and initial coin offerings (ICOs).
Interested to learn more about the fascinating process that converts privately held firms into public corporations? Take a look at the open access online module "Initial Public Offerings (IPOs)."