Three routes to the public market

Traditional underwritten IPO

Underwriters help structure an offering and distribute shares to initial investors. In a firm-commitment offering, they purchase shares from the issuer and resell them at the public offering price. Trading on the exchange follows.

Direct listing

Initial sales occur through an exchange's opening process, without the conventional pre-opening sale through a firm-commitment underwriter. A direct listing can register sales by existing holders; a primary direct listing can also raise money for the company. Always read the specific transaction documents.

SPAC combination

A special purpose acquisition company raises capital as a shell company, then seeks an operating business to acquire or merge with. The business combination is often called a de-SPAC. Investors must examine the target business, sponsor incentives, dilution, and redemption terms.

• SPAC shares, units, and warrants have different rights.
• Redemption generally relates to the investor's share of the trust account, which may be less than the market price paid.