Types of Offerings

What this video covers

• Why a public offering requires a full prospectus and SEC registration while a private placement uses a private placement memorandum (PPM) and stays exempt under Regulation D
• How initial public offerings (IPOs), follow-on offerings, and secondary offerings differ, and specifically who receives the proceeds in each case
• Why a secondary offering means the selling shareholder gets the money and the issuer receives nothing, the most common trap in this topic
• What a firm commitment underwriting entails: the underwriter purchases the entire issue, bears maximum risk, and acts as principal
• Why best efforts underwriting means the underwriter acts as agent, returns unsold shares to the issuer, and carries minimal risk
• How all-or-none and mini-max function as conditional variations of best efforts, and why the underwriter remains an agent in both
• The exact phrase "purchased the entire issue" as your trigger for firm commitment on test day