Jason Hall

This is the institutions that are actually buying the shares in the IPO.

So you hear they're going to set a price, and then that IPO price is the price that those buyers and the underwriters are paying.

In general, when a company IPOs, the company is going to issue new shares for the IPO.

So they're diluting the internal investors.

They're creating these new shares that the IPO investors, the underwriters buy, minus a fee, of course, to the banking partners.

So the company gets the proceeds.

This isn't always the case.

I'm the company we're talking about

that are looking to go public now, that would be the case.

They would be getting the proceeds, but it's not always the case.

Sometimes we see a company that's part of a private equity business that gets IPO'd.

A lot of times when that company IPO's the proceeds, they go to the PE firm.

The PE firm is selling part of its stake.

So the company doesn't get any additional liquidity.

It's just going public, right?

So that's an important thing to remember.

Sometimes you also have some insiders when a company IPOs that are also selling into the IPO.

It's not always generally the case, but sometimes that's part of it.

Usually you see insiders that have a lockup period that they can't actually sell for months, months and months after the fact.

So that's roughly the way it works.