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Forming the IPO Team

At first, after the company concludes its internal organization (see the section on preparing the company for an IPO in Chapter 12), an IPO team has to be established. This team includes, in addition to the company's management (CEO, CFO, and legal counsel), underwriters, outside legal counsel, CPAs, a financial printer, and sometimes also a PR firm.

The Underwriters

Underwriters play a central role in the sale of the shares in the IPO and thereafter. The underwriters are responsible for determining the IPO price, executing it, and distributing it among investors. The underwriters also play an important role in rendering advice on the structuring of the transaction, the timetables, and the manner of presentation of the information. The relationship with the underwriters does not end in the IPO, but rather begins there. The underwriters support the price of the share after the IPO (if necessary), provide coverage for the share through the bank's equity research department (which is separate from the underwriting department), and provide additional investment banking services to the company later on. The process of choosing the underwriters includes meetings with several underwriters and choosing a lead, or managing underwriter, which will be committed to the share. There is usually one lead underwriter or more (up to three) which manages the syndicate of underwriters and co-managers.


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