Initial Public Offering (IPO)

An Initial public offering or IPO allows a company to raise capital from public investors. Once a company issues shares to the public it is no longer a private company, it becomes a publily traded company. The IPO is the process of offering shares of a private corporation to the public by issuing stocks.

Not all companies can go public or become a public entity. They must meet requirements set out by the Securities and Exchange Commission (SEC). Usually a company must be stable and reliable and be able to predict their next quarter and next year's earning and hit revenues of at least 50 million dollars.