Question

An initial public offering is a document in which the

entrepreneur summarizes her or his business strategy for the
proposed new venture and how that strategy will be implemented.
A. True
B. False

Answer 1

The statement is false because an IPO is not a document but a firm's first sale of stock to the public. Its primary purposes are to repay early-stage investors and provide capital for company expansion.

Step-by-step explanation:

The statement that an initial public offering (IPO) is a document summarizing an entrepreneur's business strategy for a new venture and how it will be implemented is false. An IPO is, in fact, a firm's first sale of stock to the public, which allows a company to raise capital from public investors. This process is critical for two primary reasons:

• It provides the funds to repay early-stage investors, like angel investors and venture capital firms.
• It supplies the established company with financial capital needed for significant expansion of its operations.

In summary, while a business plan is a document that outlines a company's strategy and planned implementation, an IPO is an event where a company sells shares to public investors to raise capital.