When two people decide on a business venture they start with their own funds. When the business grows it requires more funds from outside in the form of equity or borrowing funds from other people. When people invest in an IPO they become the shareholder of the companies and help the companies to grow.

So in order to raise the funds from the public, the company needs to get listed or become a public limited company. Thus, the process by which a private company becomes a public limited company by the sale of its stocks to the general public for investment is known as Initial Public Offering or IPO.

So, investors who want to put money in the company in exchange for a stake in the company will need to analyze the IPO. The analysis is done on the basis of certain factors which need to be considered before you invest in an IPO.