What is the name for a company’s first sale of shares to the public on a stock exchange?

An initial public offering is a company’s first sale of shares to the public on a stock exchange.

Before an IPO, a company is usually privately held by founders, employees, or private investors. During the offering process, it works with investment banks to set terms, market the deal, and distribute shares to public investors. In the United States, the company generally files a registration statement with the Securities and Exchange Commission.

An IPO is not the same as any later share sale. A secondary offering occurs after a company is already public, while a private placement sells securities to a limited group rather than the general public. IPO proceeds may go to the company, existing shareholders, or both, depending on whether the deal includes new shares, selling shareholders, or a combination.