Tag: How do you value a company for an IPO?

The average market capitalization for all IPOs in the data set was $1.54 billion at the time of IPO. We immediately see some interesting results for these companies. Overall, negative returns: The median share price return was -7.7% since the IPO date.

You can determine the value of shares sold using the IPO price formula of the number of shares sold divided by the total amount of capital paid in . These numbers can be found in the company’s prospectus document.

Companies typically don’t like to incur more than 15% dilution in an offering, which leads the minimum company valuation for an IPO to be at least $1 Billion ($200 million/15%).