An Initial Public Offering (IPO) underwriter is a financial intermediary, typically an investment bank or a consortium of banks, that facilitates a company's transition from private to public ownership by issuing shares to investors. Underwriters play a pivotal role in ensuring the IPO's success by managing various aspects of the process.

Functions of an IPO Underwriter:

1. Due Diligence: Underwriters conduct comprehensive evaluations of the company's financial health, business model, management team, and market prospects to ensure it meets the criteria for a successful public offering.
2. Structuring the IPO: They determine the type of offering, the number of shares to be issued, and advise on the optimal timing to maximize market reception.
3. Pricing the Offering: Underwriters assess the company's value and set an appropriate offering price that balances the company's capital-raising goals with market demand.
4. Regulatory Compliance: They ensure all regulatory requirements imposed by the Securities and Exchange Commission (SEC) and stock exchanges are satisfied, including the preparation and submission of necessary documentation.
5. Marketing and Distribution: Through roadshows and investor meetings, underwriters generate interest among institutional and retail investors, facilitating the sale of shares.
6. Stabilization: Post-IPO, underwriters may engage in stabilization activities to support the stock price and maintain market confidence.

Identifying IPO Underwriters:

Information about a company's IPO underwriters is typically disclosed in the company's prospectus, which is filed with the SEC and available to the public. Additionally, financial news outlets and the investor relations sections of company websites often provide details about the underwriting syndicate involved in an IPO.

Accessing IPO Stocks:

Gaining access to IPO shares can be challenging, especially for individual investors, as a significant portion is often allocated to institutional investors. However, individual investors can participate by:

• Brokerage Accounts: Some brokerage firms offer clients access to IPOs, often requiring certain eligibility criteria, such as minimum account balances or trading history.
• Directed Share Programs: Occasionally, companies allocate shares to employees, customers, or other affiliates through directed share programs, providing an opportunity for these groups to invest in the IPO.
• Aftermarket Purchases: Investors can also buy shares in the secondary market once the stock begins trading publicly, though this may be at a different price than the initial offering.

A pre-IPO startup that achieves a $1 billion valuation based on private venture fundraising. The term was coined by venture capitalist Aileen Lee in 2013 to describe the "extremely rare and magical" billion-dollar exit. Not long after, the number of unicorns soared to 250+ as venture firms and crossover investors generously paid up for fast-growing technology companies.

One reason why IPOs are different from stocks in the broader market indices is that they lack a trading history, have a limited float and have not developed long-term shareholders who are knowledgeable about the company. For these reasons the stock is said to be unseasoned.