IPO (Initial Public Offering)

How it works

Going public requires audited financials, SOX compliance, and ~12 months of preparation with investment bankers. Companies typically IPO at $100M+ in ARR with a clear path to profitability. Modern IPOs are smaller and later than they used to be — many companies stay private until they hit $1B+ valuations, partly enabled by secondaries and tender offers.

Related terms

• Secondary sale
  A secondary sale is the sale of existing shares (from founders, employees, or early investors) to a new buyer — distinct from a primary fundraise where new shares are issued.
• Tender offer
  A tender offer is a structured secondary sale where the company arranges for a buyer (usually a growth fund) to purchase shares from any willing employee or investor at a set price.
• MOIC (Multiple on Invested Capital)
  MOIC is the ratio of an investment's total value (realized + unrealized) to the capital originally invested.