Financial Terms / I - J / Initial public offering (IPO)

Initial public offering (IPO)

The process by which a previously private company offers its shares to the public for the first time is known as an Initial Public Offering (IPO). The transfer of part or full ownership of the company goes from its private investors/founders to the public. This is why a company filing for an IPO is said to be “going public” as part/full ownership is transferred.

Companies file for an IPO when they need to give an exit to previous investors/venture capitalists, want to raise money for their operations, want to expand to new markets, and much more.