IPO Intelligence • The IPO Process

What Is an IPO Underwriter?

The bank that buys the IPO risk and sells it to investors.

Cluster: The IPO Process • Type: Evergreen Guide • Pillar: IPO Intelligence

Underwriter Defined

An IPO underwriter is the investment bank that purchases shares from the company at a discount and resells them to investors. 99% of US IPOs are firm commitment — bank guarantees proceeds.

The Syndicate Structure

• Lead Left: Controls prospectus, pricing, allocation.
• Joint Bookrunners: Help build book.
• Co-Managers: Distribution and research.

Core Functions

1. Due Diligence: Verify S-1. 2. Bookbuilding: Collect orders by price and quality. 3. Pricing: Recommend clearing price. 4. Distribution: Allocate. 5. Stabilization: Support price for 30 days via greenshoe.

How They Get Paid

Gross spread. $200M deal at 6% = $12M fees. Split pro-rata by role. Lead Left takes 60%.

Part of The IPO Process. Also read: How Investment Banks Help Companies Go Public

Continue The IPO Process

← Back to The IPO Process Hub Step-by-Step Underwriter S-1 Filing Pricing IPO Day