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A public offering is the sale of securities to the general investing public rather than to a select group of private investors. A company makes a public offering to raise capital, and in exchange it registers those securities with the Securities and Exchange Commission, making financial disclosures that any investor can access. The most well-known form is the initial public offering, when a private company sells shares to the public for the first time, but public offerings also include follow-on equity sales and public debt issuances by companies already listed on exchanges.
An initial public offering is the first time a company's shares become available to the public. Before the offering, ownership is concentrated among founders, employees, and private investors. The offering expands ownership to any investor who wants to buy shares on the open market.
The process begins months before trading starts. The company files a registration statement with the Securities and Exchange Commission, including a preliminary prospectus called an S-1. This document discloses everything a reasonable investor would need to evaluate the company: financial statements, business description, management team, risk factors, competitive landscape, and planned use of proceeds. Securities and Exchange Commission staff review the filing and issue comments. The company responds and revises until the registration is declared effective.
Once effective, the company and its underwriters conduct a roadshow, a series of presentations to institutional investors where management explains the business and solicits orders. Investment banks build an order book, assessing demand at various price levels. The final offering price is set based on that demand, and shares are allocated to investors the night before trading begins.
Once a company is publicly traded, it can raise additional capital through a follow-on offering by issuing new shares. The process is faster than an initial public offering because the company is already registered and known to investors. Follow-on offerings are typically priced at a discount to the current market price to ensure the deal sells. The discount dilutes existing shareholders, which is why stock prices often drop when a follow-on is announced.
A secondary offering is different from a follow-on offering: in a secondary offering, existing shareholders sell their shares rather than the company issuing new ones. No new capital flows to the company in a secondary offering.
Companies and governments also raise capital through public debt offerings, selling bonds to the general investing public. Corporate bonds issued publicly go through the same Securities and Exchange Commission registration process as equity offerings. U.S. Treasury bonds are sold at public auction directly through TreasuryDirect.gov and through primary dealers, with full price transparency and open participation.
The Securities Act of 1933 requires that any public offer or sale of securities be registered unless an exemption applies. Registration is not approval: the Securities and Exchange Commission does not evaluate whether an investment is good or bad. It evaluates whether the disclosure is complete and accurate. Full disclosure requirements are the tradeoff investors get for being allowed to participate in the offering without meeting accredited investor criteria.
Public offerings are expensive. Underwriter fees typically run 5% to 7% of the proceeds raised in an initial public offering. Legal fees, auditor fees, and Securities and Exchange Commission filing fees add several million dollars more. The ongoing costs of being a public company, including quarterly and annual reporting requirements, Sarbanes-Oxley Act compliance, and investor relations functions, add $2 million to $10 million or more per year depending on the company's size. These costs explain why many companies delay going public until they are large enough to absorb them without significant impact on operating margins.
With deep roots in traditional finance and the digital asset industry, Acquire.Fi operates as a specialist M&A advisory firm. Coverage spans M&A, secondaries, OTC, and capital markets advisory across digital assets and frontier tech. Our team has decades of combined experience across every stage of the deal lifecycle.
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