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Three Paths to an IPO

There are three ways an underwriter commits to love, honor and ebay when they are taking a company public:

Best Efforts. Odd legal term – like what would Worst Efforts be? In practice, Best Efforts means that the underwriter is committed to only buy securities as a reseller or agent – not as a principal. They buy them and then turn around and dump – er, sell them. One of the big issues underwriters deal with is the question, “How much is enough?” – That is, would Facebook still go public...

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