Editing Initial public offering (section)

===Advantages===
When a company becomes publicly listed, the money paid by the investing public for the newly issued shares goes directly to the company (primary offering) as well as to any early private investors who opt to sell all or a portion of their holdings (secondary offerings) as part of the larger IPO. An IPO, therefore, allows a company to tap into a wide pool of potential investors to provide itself with capital for future growth, repayment of the debt, or working capital. A company selling common shares is never required to repay the capital to its public investors. Those investors must endure the unpredictable nature of the open market to price and trade their shares. After the IPO, when shares are traded in the market, money passes between public investors. For early private investors who choose to sell shares as part of the IPO process, the IPO represents an opportunity to [[monetize]] their investment. After the IPO, once shares are traded in the open market, investors holding large blocks of shares can either sell those shares piecemeal in the open market or sell a large block of shares directly to the public, at a [[fixed price]], through a [[secondary market offering]]. This type of offering is not dilutive since no new shares are being created. Stock prices can change dramatically during a company's first days in the public market.<ref>{{cite news |last1=Jessica |first1=Matthews |title=How regular investors can access IPOs |url=https://fortune.com/2021/07/08/how-to-access-ipos-regular-investors/ |access-date=30 July 2021 |work=Forbes |date=8 July 2021}}</ref>

Once a company is listed, it is able to issue additional common shares in a number of different ways, one of which is the [[follow-on offering]]. This method provides capital for various corporate purposes through the issuance of equity (see [[stock dilution]]) without incurring any debt. This ability to quickly raise potentially large amounts of capital from the marketplace is a key reason many companies seek to go public.

An IPO accords several benefits to the previously private company:

* Enlarging and diversifying equity base
* Enabling cheaper access to capital
* Increasing exposure, prestige, and public image
* Attracting and retaining better management and employees through liquid equity participation
* Facilitating acquisitions (potentially in return for shares of stock)
* Creating multiple financing opportunities: equity, [[convertible debt]], cheaper bank loans, etc.
* Benefits for pre-IPO owners in the form of Tax Receivable Agreements<ref>{{cite journal |url=https://scholarship.law.vanderbilt.edu/cgi/viewcontent.cgi?article=1028&context=vlr#:~:text=A%20new%20tax%20innovation%2C%20the,almost%20never%20used%20in%20IPOs. |last=Shobe |first=Gladriel |title=Private Benefits in Public Offerings: Tax Receivable Agreements in IPOs |journal=Vanderbilt Law Review |volume=71 |issue=3}}</ref>