> The problem is no underwriter would take an IPO for a million shares at say $10/share. It's just not something that they can make money on.
If you're offering a small fraction of the outstanding float, you don't need an underwriter because you've elected to reduce your risk. If markets are unfavourable, you raise less. Oh well. You've kept plenty of shares to try again next time.
We need to get over this "go big or go home" mentality.
I see your point, the problem is that if you don't do a road show, then no fund is going to invest in you, with google/facebook hyped companies excepted.
With out an institutional investor( Buy side) your stock will have a hard time getting any traction.
I guess it depends on your definition of allocated and offered, but to the exchange, they have minimum requirements for what is offered on their exchange.
If the stock won't trade, they won't let it list, period:)
The rules aren't terribly stringent, and if you can stay above this then it might work.
The problem is no underwriter would take an IPO for a million shares at say $10/share. It's just not something that they can make money on.
This would require a new type of low cost underwriter.
Alos remember, the reason why we can set a price on the stock is that we know the float ahead of time and we can estimate what the company is worth.
How can you price a share if the amount of tradable shares is materially changing each day?