First, let's start with the traditional definition of an IPO.

IPO (Initial Public Offering) is the first sale of shares of any company, when the range of buyers is practically unlimited. Usually such offers are made through the stock exchange, so IPO is called the first public offering on the stock exchange.

The company (the seller of shares) needs it to attract capital for development. Investors buying shares on the stock exchange - in order to make money on dividends paid by the company from its profits or on the growth of the share price.

Before the IPO, the company is called a private company and its shares are owned by the founders, employees and early investors. The shares of such companies are not traded on the stock exchange, but they can be bought on the over-the-counter market. After the IPO, the company becomes public and its shares begin to trade on the stock exchange.

They became stockholders the day they decided to create the company. They are also usually the largest shareholders.

Founders in the classical view have one motivation - to raise capital for the development of the company. To raise capital in such a way that investors will not be disappointed and will continue to invest in it in the future. This can only be achieved if the share price grows gradually.

However, the founders may have the added motive of selling some shares and cashing out, rewarding themselves for growing the company over the years.

Typically, founders not only own shares but also take an active role in management, so they are the ones who make the decision to go public.

They joined during the company's many years of growth: they gave money for development and in return received shares.

An investment fund is also an abstraction, with the fund's investors and managers behind it. And they are all united under the umbrella of the fund with one goal - to make money out of money. And to do that, you need to find buyers.

Selling shares at the IPO or immediately afterwards is not always part of a fund's plan, so it is important for them to be able to sell them at any time. It is much easier to find buyers on the stock exchange than on the OTC market. Therefore, such funds are interested in the company going public, but they are even more interested in making sure that the share price does not fall after the IPO.

Funds can have a lot of influence over founders in the IPO decision and timing process. Of all the shareholders, they have the most experience in raising capital.

In addition to the founders, the main figures in the preparation process are the CEO and CFO. Their task is to prepare the reporting in accordance with the requirements of the regulatory authorities.

Eventually, the company must submit a document called an "S-1" form to the public. It discloses all the figures about the business for the last years before the IPO. It is on the basis of this document that investors will evaluate the company's prospects and decide whether to buy shares on the stock exchange or not.

However, reporting is not enough. You need to actually show good results and business prospects.

By and large, it is the responsibility of the company's top managers. It takes from 1 to 3 years from the moment the decision to IPO is made to the IPO itself. During this time, managers try to show maximum results in successful business areas, do minimum in risky areas and create a positive picture of the company's future.

The main thing about the management issue is options. All key employees of the company have options and after the IPO they will be able to turn them into shares and shares into money. As a rule, these are sums that are many times their salaries, so the IPO is a long-awaited event for them. Few people are keen to sell everything at once, so managers are also keen for the shares to rise after the IPO.