First, a company goes public with an initial public offering (IPO) of stock. For example, XYZ Inc. has a successful IPO and raises $1 million by issuing 100,000 shares. These are purchased by a few dozen investors who are now the owners (shareholders) of the company. An initial public offering (IPO) is considered a primary offering of shares to the public. Sometimes, a company will decide to raise additional equity capital through the creation and sale of more shares in a secondary offering. Companies perform secondary offerings for a variety of reasons. Initial public offering (IPO) or stock market launch is a type of public offering in which shares of a company are sold to institutional investors and usually also retail (individual) investors. An IPO is underwritten by one or more investment banks , who also arrange for the shares to be listed on one or more stock exchanges .