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Don’t be concerned if the price of your stock doesn’t skyrocket on the day of your IPO. Analysts find that the most profitable companies start out slow but continue to build value over time. [23]

The offering price is set by the underwriters who want to ensure an active after-market for the shares. However, the company does not receive any proceeds for shares traded in the after-market whether they are above or below the offering price.

If you have included any of your privately-held shares in the offering, the proceeds from the sale will go to you, not to the company. This deal can only happen if disclosed to the SEC in the S-1 form and if the SEC approved the sale.[24]

On the day of your IPO, the bank will purchase all of the shares that you are making available. Then, they will attempt to sell them to the public. Realistically, the only investors who will be able to get in on the IPO are the most favored customers of firms in the selling syndicate. The average investor won’t be able to purchase your stock until a later date. By then, if the investment bank has done a good job of valuing your company and promoting the sale of your stocks, the value of your stocks will be higher than the initial offering price.