Company’s Direct IPOs: Should You Take the DIY Route?
by Dan Brecher on August 22, 2013
Most companies that undertake an initial public offering (IPO) partner with an investment bank to serve as an underwriter. The role of the underwriter includes helping to establish the initial share price and the public market, as well as seeking to interest analysts to follow the stock.
In the midst of the growing crowdfunding buzz, direct public offerings (DPO) have
recently come back into vogue. In a Do-It-Yourself (DIY) DPO, the business sells shares
directly to the public without using an investment bank as the middleman. Purchasers
may include friends, family, customers, employees and other third parties. Well-known
companies that have used direct public offerings include ice-cream giant Ben & Jerry’s
and organic macaroni and cheese maker Annie’s Homegrown.
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