Initial Price Offerings
What is an IPO?

An IPO is the abbreviation for “Initial Public Offering”.
It can also be known as “Initial Price Offering”

An Initial Price Offering (IPO) is where a company raises capital by offering existing or new shares in a company to the public for the first time (also known as a company Float) or otherwise known as “Going Public”.

An IPO allows a privately owned company to expand from a private company, to become listed on a stock exchange such as the Australian Stock Exchange (ASX).

To reinforce this: The main objective of taking a company to an IPO is to raise capital to expand its operations by offering existing shares or the offering of new shares in its company to the public for the first time.

By investing in an IPO, it will allow investors to purchase shares at a pre-set IPO price before the company begins trading on a stock exchange with the hope that the IPO shares that are on offer will increase in value in that company over time.

It’s important to note that there may be a set minimum or maximum amount of IPO shares that may be offered and purchased with any IPO offer.

There are many myths that many IPO offers are initially only offered to existing “High Net Clients” of participating affiliated investment firms, this is incorrect.

All IPOs are open to the general public despite the selective marketing efforts of the underwriting brokerage firm that is offering the IPO.

Benefits
Why invest in an IPO?

There are many advantages and benefits for a company to go public via an IPO.

Raising Quick Capital

The main benefit and reason as to why companies go public is it enables the company to raise capital quickly in order to expand their operations in order to achieve their desired company growth.

The company may use these funds to expand its operations by allocating funds to its research and development departments, develop new technologies, hire more employees, expand on its infrastructure, reduce debt, acquire beneficial companies and fund capital expenditure as a whole.
The money raised with an IPO is designed to expand the growth and longevity of the company.

Company Advantages
Advantages For The Company Offering An IPO

An IPO is the abbreviation for “Initial Public Offering”.
It can also be known as “Initial Price Offering”

An Initial Price Offering (IPO) is where a company raises capital by offering existing or new shares in a company to the public for the first time (also known as a company Float) or otherwise known as “Going Public”.

An IPO allows a privately owned company to expand from a private company, to become listed on a stock exchange such as the Australian Stock Exchange (ASX).

To reinforce this: The main objective of taking a company to an IPO is to raise capital to expand its operations by offering existing shares or the offering of new shares in its company to the public for the first time.

By investing in an IPO, it will allow investors to purchase shares at a pre-set IPO price before the company begins trading on a stock exchange with the hope that the IPO shares that are on offer will increase in value in that company over time.

It’s important to note that there may be a set minimum or maximum amount of IPO shares that may be offered and purchased with any IPO offer.

There are many myths that many IPO offers are initially only offered to existing “High Net Clients” of participating affiliated investment firms, this is incorrect.

All IPOs are open to the general public despite the selective marketing efforts of the underwriting brokerage firm that is offering the IPO.

Credibility
Company Recognition & Credibility

When a company goes public it also creates a greater public awareness about the company.

By creating a greater company awareness often helps the company gain greater traction with their existing operations as well as gain the interest of further potential investors.

Once a company becomes a publicly listed company it also helps the company achieve a perceived level of stability. With this new perception, the company may now be seen as a more prestigious company gaining more public and institutional support.

Reducing Costs & Increasing Employee benefits

When a company goes public, the management and employees of the company will often reduce their salaries and entitlements lowering the operational cost of the company (reducing Costs). These employees may be offered allocated shares in the company based on performance achievements, so in other words the lower the cost for the company the higher the share price will become that will in turn benefit the employees and the shareholders if the stock price should rise.

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Pre-IPOs
What Is a Pre-IPO

How does a pre-IPO work

The purpose of a Pre-IPO is for the company to raise new capital prior to offering shares to the public via an official IPO.

A Pre-IPO is usually offered to larger institutions or Wholesale Investors (Sophisticated Investors) who are larger net worth Investors.

These larger investors are offered the opportunity to purchase larger groups of shares in the selected company at a discounted rate prior to the companies intention of being listed on the stock exchange.

Benefits of Investing in Pre-IPOs

For the Investors: When a Pre-IPO is offered, the company that is offering the Pre-IPO will offer the investors a significantly discounted price for an agreed portion of shares in the company prior to the official launch of the IPO. The price offered will be lower than that what is estimated to be advertised in the company IPO prospectus.

By investing in a Pre-IPO you also have the opportunity to get in at the proposed lowest point (ground Floor) this provides the investor with the opportunity to achieve potential higher growth in a short period of time and over an anticipated longer investment time period.

For the company offering the Pre-IPO: it will help the company with immediate cash flow and reduce financial risks prior to the official IPO offer.

Disadvantages of a Pre-IPO

For the investors: It is widely assumed that the discounted Pre-IPO price offered will be issued at a lower price compared to the price that will be offered to the public, this is not always the case, as the company that issues the shares in a Pre-IPO offer does not have to issue any guarantee that the price is guaranteed to be at a lower price. It is only when an IPO is listed that the actual share Price is determined once it’s listed on the stock market.

For the company: A company does not want to dispose of all of its available shares in a Pre-IPO agreement as it may lead to those Pre-IPO investors to start selling their Pre-IPO issued shares immediately once the company has been listed on the stock exchange at a higher price.

To protect the companies share price, it is common for companies to protect themselves by having the Pre-IPO investor agree to hold the company stocks for a certain time period and or have the investor agree that selling off shares must be in smaller parcels over a  period of time to avoid large sell-offs affecting the market price of that company.

Ways to Raise Funds
Pro-Rata entitlement offers

The most common way for companies to raise funds is by offering existing shareholders a Pro-Rata entitlement offers.

A Pro-Rata entitlement offer is where existing shareholders are entitled to purchase additional shares at a significant discount based on the amount of share they currently own.
For example: If the company stated that an existing investor can purchase 1 additional share for every 10 shares that they currently own and the investor already owned 100 shares, then the investor would be entitled to purchase 10 additional shares at the discounted share price.

Share Purchase Plan

Another common offer that is used to raise capital is by implementing a Share Purchase Plan. This is where a company will offer a pre-determined amount of shares in its company to the public for the exchange of funds raised. It is common that the company may restrict the number of shares that are available per investor.

Institutional Offers

This is where a company will approach brokerage firms or investment company’s and offer the number of shares available to larger investors. By offering an institutional offer the capital raising exercise will normally be a lot quicker process for the company however the company may have to pay the brokerage firm a fee and lower the offered stock price in negotiations.

Venture Capital Funding

Companies may also seek funding from venture capital firms that manage the funds of their investors.  A venture capitalist company will negotiate with the company seeking the Capital raise and negotiate terms that suit both the venture capitalists and the company. This is normally the last resort for a company as the venture capital firms will normally offer extremely low share price offers to the company with the intention of seeking a higher return for its investors.

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Listing an IPO
List an IPO

For those companies that would like to explore either a capital raising venture or list their company on a stock exchange as an IPO, we encourage you to contact our office either via phone or by completing the online inquiry form below

Capital Raising Requests

We understand that all companies are different and all companies have their own pre-determined outlook on how they wish to expand or support their current operations. There are many methods that can be implemented to raise capital for a company. We encourage you to contact us to discuss what options are available.

IPO Enquiries

For any company that is considering listing their company via an IPO on an Australian stock exchange, we can help you achieve this by offering the following specialised services.

IPO Services
Our IPO services Include:
  • Appoint an IPO management team
  • Initiate company structuring meetings
  • Organise company compliance procedures & reports
  • Initiate listing discussions with your selected stock exchange
  • Incorporate your new public company
  • Adopt the exchanges compliance constitutions
  • Prepare the official listing applications
  • Negotiate underwriting and funding agreements
  • Commence marketing campaigns
  • Draft listing applications
  • Lodge your prospectus with ASIC
  • Open the IPO to investors
  • Assist to raise the required capital for the IPO
  • Finalise & close the IPO
  • Commence your listing
  • Provide ongoing compliance and financial Audits (if required)

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The information on this website is not intended to be an inducement, offer or solicitation to anyone outside of Australia and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

Australian Managed Funds is the registered trading name of “Share Prices Funds Management Pty Ltd” ACN: 623 398 890.

Australian managed Funds is a corporate authorised financial representative of Share Prices Australia Pty Ltd, AFSL licences 287367 and is also a corporate authorised representative of AFSL 226199 (Gleneagle Asset Management Limited) for the purpose of providing financial services relating to Managed Investments and Capital Raising. AFS Representative Number 001263287

Gleneagle Capital is a trading name of Gleneagle Asset Management Pty Limited, located at Level 27, 25 Bligh Street, Sydney NSW 2000, Australia (ABN 29 103 162 278) is regulated by ASIC and licensed to carry on a financial services business in Australia under Australian Financial Services License No. 226199. Any information or advice contained on this website is general in nature and has been prepared without taking into account your objectives, financial situation or needs. Before acting on any information or advice on this website, you should consider the appropriateness of it (and any relevant product) having regard to your circumstances and we recommend that you seek independent financial advice if necessary. Please read our Financial Services Guide (FSG) and Product Disclosure Statement (PDS) which are important documents and which are available for downloading from this website. Alternatively, please contact us on the details provided on this. Gleneagle Capital is not able to take clients from Burma, Côte d’Ivoire, Democratic People’s Republic of North Korea, the Democratic Republic of the Congo, Eritrea, Former Federal Republic of Yugoslavia, Ghana, Iran, Iraq, Lebanon, Liberia, Libya, Japan, New Zealand, United States of America, Somalia, Sudan, Syria, and Zimbabwe. All financial products involve risk and you should ensure you understand the risk involved as certain financial products may not be suitable to everyone. Past performance of any product described on this website is not a reliable indication of future performance.

Benefits
Advantages of investing in an IPO for retail investors

There are many advantages and benefits for a company to go public via an IPO.

Raising Quick Capital

The main benefit and reason as to why companies go public is it enables the company to raise capital quickly in order to expand their operations in order to achieve their desired company growth.

The company may use these funds to expand its operations by allocating funds to its research and development departments, develop new technologies, hire more employees, expand on its infrastructure, reduce debt, acquire beneficial companies and fund capital expenditure as a whole.
The money raised with an IPO is designed to expand the growth and longevity of the company.

Select the Fixed Income Fund (Cash Fund) that best suits you!