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Step 1
Find out about the planned IPO. Typically, a company interested in going public will contact financial institutions about underwriting its IPO. Your institution may want to establish relationships with the local businesses so that they will come to you when they need an underwriter.
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Step 2
Negotiate the details with the company. You want to find out as much as possible about this company both financially and personally. You need to know how many shares the IPO will consist of, the price per share and the type of IPO, as well as the views of the company's owners.
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Step 3
Devise a financial strategy to sell the shares. If your institution has confidence in its ability to sell the shares, you may want to purchase them upfront from the company. In this case, you will buy the shares at a discount and resell them at a higher price to make a profit.
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Step 4
Consider other options for selling the shares. You can also auction off shares, commit to sell a certain number without paying upfront or commit to do your best to sell shares without making any specific commitment.
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Step 5
Get copies of the company prospectus. This legal document provides an outline of both the company and the IPO shares plan. You need to provide a copy of this document to all potential shareholders so they can learn more about the company and the responsibilities of shareholders.
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Step 6
Call your clients with large account balances within your institution. Underwriters generally offer IPO's to their preferred investors, since an investor with more money can buy a larger percentage of IPO shares if she is interested.
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Step 7
Keep in touch with the company that you're underwriting. The company should know how the sale of IPO shares is going based on internal record keeping, but you should also maintain an independent system of checks and balances. If the underwrite sales goes poorly, the company may cancel the IPO campaign.
