How does an IPO work?

What will be an ideal response?

Once it's decided to make a securities offering, the company establishes a market value in the private sector. This
value is estimated by an investment-banking institution, which will also sell the firm's shares to public investors.
During this process, the company files an S-1 statement, which states its value proposition and financial prospects,
with the Securities and Exchange Commission (SEC) and various state securities commissions. Finally, the company
and its brokerage firm "time" the offering to get maximum value from the sale of its stock. One thing that
companies are required to discuss at length is the challenges they face that could adversely affect shareholders.
Usually, the prospectus describes the perceived business opportunity, outlines the firm's strategy for exploiting it, and
details its current products and activities, generally in the context of the company's overall expansion strategy. The
firm must clearly define its vision and describe its mission, business initiatives, and objectives.