Initial Public Offering

An IPO (Initial Public Offering) is the first time—or cleverly named "initial" time—when a company sells its stock to the public.

Why is this such a big deal when companies sell shares to private investors all the time, raising various funding rounds for growth?Because the legal strictures in selling shares to the public require massive paperwork, disclosure, and legal and accounting conformance in documentation. Why all the paperwork when selling to the public? Answer: because Ma and Pa Kettle bought the Brooklyn Bridge 14,000 times before regulators created disclosure laws and grew any kind of teeth in the manner in which they policed bad actors. And we don't just mean Keanu Reeves.

The process revolves around a middle man, known as an underwriter, who stands behind the accuracy of the reporting of the company's numbers and then remains responsible for marketing those shares to mutual funds, hedge funds, and other places where wealthy people buy public stocks with risk.

Take a look at the 11 Greatest IPOs of All Time.