Initial public offerings (IPOs) were long the well-kept secret of Wall Street insiders. Individual investors didn’t take notice of IPOs until the spring of 1996, when Yahoo announced that they were going public. They went on to price at $13 a share, and rocket up 154% to $33 a share.

Yahoo captured the attention of individual investors because it was the first mainstream internet company to go public. After that, investor interest in IPOs erupted.

Today, most IPOs still have some combination of hype and hope. New technologies naturally offer exciting opportunities. But more than ever, investors have begun to view IPOs as part of their core investment strategy. That means some portfolio allocation to new stocks, alongside traditional seasoned equities.

From a broader perspective, a healthy IPO market plays an important role in capital formation, economic growth, job creation, and funding breakthrough technology.