Chapter 11 Preparing for an Initial Public Offering An initial public offering (IPO) is a legal process through which a company registers its securities with the Securities and Exchange Commission (SEC) for sale to the general investing public. Many entrepreneurs view the process of "going public" as the epitome of their financial success and reward; however, the decision to go public requires considerable strategic planning and analysis from both a legal and a business perspective. The planning and analysis pro- cess involves weighing the costs and benefits; understanding the process and its costs; and understanding the obligations of the company, its directors, its officers, its advisors, and its shareholders once the company has successfully completed its public offering. 211 American Management Association www.amanet.org