文档介绍：Going Public – IPO Lecture
Venture Capital Process
Seed
Money
1st Round
Financing
2nd Round
Financing
Clean-up
Financing
Year 1 Year 3 Year 5
Private Investment
Venture Capital Firms
Going Public - Details
Forms (audited financials)
S-1 (large offerings)
SB-1 (<$10m)
SCOR (<$1m)
Direct Public Offering (DPO)
Usually issue 20-40%
Primary v. Secondary issue (unseasoned v. seasoned)
Investment Bankers)
Due Diligence
File with SEC
Market securities
Preliminary Prospectus (“red-herring”)
File S-1 documents
“Road Show” to potential purchasers (mutual funds)
Costs (7% spread, underpricing IPO)
The benefits of IPO
Enhance the corporate’s reputation
Increase the game capability with the financial institutions
Establishing a new raising funds method by capital market
Received the capital advantage in more cheaper funds
IPO process
On the Road
Underwriters and management team put together road show for prospective big investors, no media, last about 2 weeks; major cities.
Can discuss business prospects, but only orally; can expand the prospectus but not differ from prospectus
Lead underwriter gets indication of interest
Final prospectus is printed, distributed for investors
Investors subscribe to stock at an offering price
After market closes, day before public trading (IPO declared effective)
List of buy/sell orders called the book
Difference between offering price and syndicate price about 7 to 8% (gross spread) – split between broker and underwriter
IPO process
6 to 8 weeks before SEC registration
Issue Red Herring to see interest (filed with SEC) –no price or size
Called Red Herring because of statements outlined in “RED”
Hold All-hands meeting, for IPO team and lead underwriter to decide responsibilities
Start developing final prospectus
SEC Registration
Filing of S-1 documents and prospectus
SEC imposes quiet period (until 25 days after IPO)
SEC reviews documents
Form syndicate
Lead underwrite forms group of underwriters to help sell deal, syndicate membe