What is the difference between an IPO and a secondary offering?

What is the difference between an IPO (Initial Public Offering) and a direct listing Introduction: The Gateway to Public Markets Hello everyone! In the realm of finance, there are multiple routes for a private company to enter the public market. Two popular methods are Initial Public Offerings (IPOs) and Direct Listings. Today, we'll explore the nuances, advantages, and drawbacks of each approach. The IPO: A Traditional Pathway An IPO is a well-established method for companies to go public. It involves engaging investment banks as underwriters, who assist in determining the offering price and marketing the shares to potential investors. The process typically includes a roadshow, where company executives present to institutional investors. Once the shares are sold, they start trading on the stock exchange. The Benefits of an IPO For companies, an IPO can be a significant milestone. It provides access to substantial capital, enabling growth, acquisitions, and debt repayment. Additionally, an IPO enhances a company's visibility, credibility, and brand recognition. For investors, an IPO can offer the opportunity to invest in a company's early stages, potentially reaping substantial returns if the company performs well in the public market.