how an initial public offering ipo works
before an ipo a company is considered private as a pre ipo private company the business has grown with a relatively small number of shareholders including early investors like the founders family and friends along with professional investors such as venture capitalists or angel investors an ipo is a big step for a company as it provides the company with access to raising a lot of money this gives the company a greater ability to grow and expand the increased transparency and share listing credibility can also be a factor in helping it obtain better terms when seeking borrowed funds as well 