An Initial Public Offering (IPO) is a process that allows a company to raise capital by selling shares of ownership to private institutions and the general public. The transaction takes place in a special market called a stock exchange. There are specific regulations and requirements to an IPO, and startups normally do not qualify. They have to wait some time and meet these requirements before it can be offered to the public.

It’s like building a house, for example, and offering it for sale. Except instead of just one person buying it, you have many more people putting in money and thus becoming part owners of the house.

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