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In Defense of the IPO, and How to Improve It
Article

In Defense of the IPO, and How to Improve It

A16Z, 2020


Editorial Rating

8

Qualities

  • Background
  • For Experts
  • Insider's Take

Recommendation

While the initial public offering is still the most favored vehicle by which new companies can tap the equity markets, entrepreneurs now have a range of options, including direct listings, special purpose acquisition companies and IPOs. Nonetheless, “going public” remains a complex process, and stakeholders need to thoroughly understand the mechanics behind it. Equity professionals Alex Rampell and Scott Kupor investigate changes in the financial landscape and offer strategic insights to financial professionals, investors and entrepreneurs.

Take-Aways

  • The initial public offering has its detractors, but it remains the primary platform for companies “going public.”
  • An IPO list price may be far lower than its trading price because of supply and demand imbalances.
  • A differential between IPO list and trading prices doesn’t necessarily mean that the company missed out on raising additional capital.

About the Authors

Alex Rampell and Scott Kupor are partners at Andreessen Horowitz.


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