3. Initial Public Offering (IPO)

An Initial Public Offering (IPO) is the process by which a private company offers its shares to the public for the first time. This transition allows the company to raise capital from investors, which can be used for growth, paying off debt, or other business needs. When a company goes public, its shares are listed on a stock exchange, enabling investors to buy and sell them. IPOs can provide significant financial opportunities for the company and its early investors, but they also come with risks, as the company must now adhere to public reporting standards and market fluctuations.