Small companies looking to further the growth of their company often use an IPO as a way to generate the capital needed to expand.
The initial public offering and listing of a company (IPO) allows:
- the company itself to raise new capital with relative ease; and
- existing shareholders to sell and trade their holdings in the market
One of the most important changes is the need for added disclosure for investors. Public companies are regulated in regard to periodic financial reporting, which may be difficult for newer public companies. They must also meet other rules and regulations.