Step 10: The Offering

In most cases, once the final price is set for the stock and the SEC receives the pricing amendment, the registration statement is declared “effective” within a matter of hours. Then several things happen very rapidly:

• As previously agreed, the underwriter officially purchases the designated number of shares of stock the company has agreed to offer through the IPO.
• Then, the underwriters officially release the stock for sale to the public on the stock exchange where the company has been accepted for listing.
• The next day, when the opening bell rings for the stock exchange to open, the IPO officially begins.

What an exciting day! At long last, everything you have worked so hard to attain is finally happening. If there is strong demand for the stock, it’s possible the price will rise substantially before the day is out. Most importantly, as a result of the IPO, you’ll receive the capital to keep growing your business.

While some entrepreneurs look at the IPO as the ultimate symbol of success, the IPO is really only the beginning of a whole new phase of growth for your company. What counts the most is what you do with the money you’ve raised and how well you make the transition from a privately-held business to a publicly-owned company.

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