The method of IPO is carried out in the following order: due diligence-finding problems-solving problems-preparing prospectus-communicating with CSRC-completing IPO. The whole process cycle is very long, and three to five years is normal.
Usually, the shares of listed companies are sold through brokers or market makers according to the agreed terms in the prospectus or registration statement issued by the corresponding CSRC. Generally speaking, once the initial public listing is completed, the company can apply for listing on the stock exchange or quotation system. A limited liability company shall be changed into a joint stock limited company before applying for initial public offering.
Advantages of IPO:
Raise funds to attract investors; Enhance liquidity; Improve visibility and employee identity; Reward individuals and venture capital; It is conducive to improving the enterprise system and facilitating management.
Disadvantages of IPO:
Audit costs increase, and companies must comply with SEC regulations. After IPO, the influence of listed companies increases, and roadshows and pricing are easily speculated by brokers; Without control of the company, venture capitalists can easily make a profit and quit.