IPO Participants
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IPO Process Library · 01 Fundamentals
Last Updated | November 11, 2026
Key IPO Participants
An IPO involves a long list of parties beyond the company and its banks: lawyers, auditors, regulators, exchanges, and investors, each with a defined role and legal exposure.
- The company and its board are ultimately responsible for the S-1 and the offering.
- Underwriters and their counsel run diligence and the marketing process.
- The SEC reviews disclosure; FINRA reviews underwriting terms; the exchange approves listing.
- Institutional investors drive demand; retail typically trades after listing.
Who does what
| Participant | Role |
|---|---|
| Company and management | Issue the shares, prepare the story, sign the S-1, and present on the roadshow. |
| Board of directors | Approves the IPO, oversees disclosure, and signs the registration statement. |
| Selling shareholders | Existing holders (founders, venture funds) who sell shares in the offering. |
| Lead underwriters | Advise, diligence, market, price, and allocate the offering. |
| Syndicate and co-managers | Add distribution and research coverage. |
| Company counsel | Drafts the S-1 and advises on securities law, governance, and disclosure. |
| Underwriters' counsel | Conducts diligence for the banks and negotiates the underwriting agreement. |
| Independent auditor | Audits financial statements and provides comfort letters. |
| SEC | Reviews the registration statement and declares it effective. |
| FINRA | Reviews underwriting compensation and terms. |
| Stock exchange | Approves listing and runs the opening auction. |
| Transfer agent and registrar | Records share ownership. |
| Financial printer or filing agent | Formats and files the S-1 on EDGAR. |
| Institutional investors | Fund managers and others who build the order book. |
| Retail investors | Individuals who may receive small allocations or buy after listing. |
Who is on the hook
Under Section 11 of the Securities Act, the issuer, directors, signing officers, auditors for their audited statements, and underwriters can face liability for material misstatements or omissions in the registration statement, subject to defenses such as due diligence. That exposure drives the thorough diligence and cautious drafting in every IPO.
Common questions
Does the SEC approve an IPO?
The SEC reviews disclosure and declares the registration effective, but does not endorse the company or its price.
Why two law firms?
The company and the underwriters have different interests and exposure, so each uses its own counsel.
Methodology & Sources
Synthesizes SEC rules and guidance (Securities Act of 1933, Exchange Act of 1934, Regulation S-K), NYSE/Nasdaq listing standards, FINRA rules, and public S-1 filings. Cross-checked against primary documents. Rules, thresholds, and timelines change; confirm current requirements with counsel before acting. General education, not legal or investment advice.
Author: Erwin Castro
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