236 Raising Capital Alternatives to Using a Traditional IPO A stock offering of any type has not traditionally been the first financing strategy of small, developing companies. But a few changes in federal and state securities regulations, as well as the advent of Internet commerce, have turned the tables on the traditional methods that small businesses use to obtain equity investment. The Internet is creating new possibilities for companies that are looking to raise capital; however, it is also creating some confusion concerning what the differ- ences are between initial public offerings and direct public offerings (DPOs). Direct Public Offerings A direct public offering is a primary market sale of securities (stock or deben- tures) from the company issuing the shares to the public buying the shares. In essence, it is a "do-it-yourself" public offering. The issuer usually performs the underwriting structuring, filing, and selling of its offer without the underwriter and selling syndicate that is used in an IPO. DPOs date back to 1976, but they have gained momentum since 1989, when the SEC simplified registrations for small companies.