Your company believes it is valuable. Now it must convince the market
Before the IPO, the company's value may be an internal view held by the founder or CEO. Once shares are offered, that view faces a real test: other players decide whether to accept the price, reserve shares or keep their money.
An attractive proposal may strengthen company cash and open a new stage of growth. A weak proposal may attract less demand. Either way, the IPO provides information about how much interest the company genuinely creates.
A public offering at a glance
The IPO panel connects four figures: how many shares exist, how many are offered, the price per share and the level of market interest.
4,400 shares remain available before the offering is fully covered.
Demand is strong, although the offering is not yet fully covered.
Illustrative example. Figures and names do not belong to an actual BoardMasters IPO.
The four decisions that build the offering
Total number of shares
Defines how company capital is divided and what percentage each holding represents.
Shares offered
Determines how many shares investors may reserve during the public offering.
Offering price
The amount an investor must pay for each share being offered.
Percentage sold
Shows how much ownership is being opened to the market and how much control may be shared.
From share price to company valuation
The IPO price should not be interpreted alone. It must be connected with the number of shares to understand the value proposed by the company.
A low share price is not always cheap
A ℬ 10 share may represent a more expensive company than a ℬ 100 share if the total number of shares is very different.
Three opinions on the same price
Finance, Aston and Fergusson provide references on the offering price. Their views add context but do not replace each player's analysis.
The verdict texts are educational examples. Actual opinions may vary with each offering.
Demand shows whether the story is convincing
During subscription, other players may reserve shares. Market support shows how much interest the offering has attracted compared with the total available.
The IPO as a journey
The company reviews results, equity, cash and strategy.
It defines price, shares offered and percentage of capital.
Investors analyse the company and reserve shares.
Market support and capital raised are calculated.
The company enters a new stage with outside shareholders.
What an investor reviews before reserving shares
Price
Does the proposed valuation make sense relative to company size and equity?
Results
Is the business producing consistent EBIT and net profit?
Use of capital
Does the company explain what the money is for and how it may create growth?
Shareholder power
Could the holding provide strategic as well as financial value?
The company receives capital and the founder shares ownership
An IPO may strengthen cash while changing ownership. The effect depends on the percentage sold and the final capital structure.
Private company
- Founder
- 100%
- Outside shareholders
- 0%
- Shares
- 80,000
- Capital raised
- ℬ 0
Listed company
- Founder
- 80%
- New shareholders
- 20%
- Shares
- 100,000
- Fundraising target
- ℬ 1,000,000
The founder owns a smaller percentage of a better-funded company
The strategic question is whether the new capital can create enough value to compensate for the ownership being shared.
Three possible interpretations at close
The offering convinces
The company raises a large part of its target and enters the market with a broad shareholder base.
Interest with reservations
The company raises resources, although part of the market has not fully accepted the valuation.
The price finds few buyers
Valuation, results, strategy or the timing of the offering may need to be reconsidered.
After the IPO, another game begins
Market price
Shares may gain a market reference followed by other players.
Shareholders
The company now has owners seeking returns, dividends or influence.
Corporate governance
Ownership starts to matter for the board, decisions and future control.
Common IPO preparation mistakes
Pricing through pride
The valuation must be defensible to investors with other opportunities available.
Selling too much capital
Raising more money may leave the founder in a much weaker ownership position.
Failing to explain the use of funds
Asking for capital without a clear strategy reduces confidence.
Ignoring demand
Reservations provide information about how the market perceives the offering.
Before opening subscription
Valuation
Check the total value implied by the proposed price.
Capital
Define how much money is really needed and why.
Percentage
Calculate how much ownership will pass to other players.
Results
Present financial development that the market can analyse.
Strategy
Explain how new capital will help create value.
Control
Anticipate how ownership will change after closing.
Frequently asked questions
What is an IPO in BoardMasters?
It is the process through which a private company offers shares to other players, attempts to raise capital and prepares to become listed.
Does the company receive money automatically?
No. Capital raised depends on other players choosing to reserve or subscribe to the shares.
How is implied valuation understood?
In simplified terms, by multiplying the offering price by the total number of shares.
What does market support mean?
It is the proportion of the offering that attracted investor interest or subscriptions.
Does going public dilute the founder?
It may reduce the founder's relative percentage when new shareholders enter the capital.
Do the agencies guarantee the price is correct?
No. Finance, Aston and Fergusson provide references, but each player must complete their own analysis.