An individual public offering is offered to institutional investors. This is because the company that is issuing the IPO is looking for large amounts of capital, which requires the kind of capital that is typically reserved for large investment banks. In very rare cases, if an individual investor is a client of an investment bank, and has the financial resources to do so, they may be invited to participate in the IPO through their brokers. This, however, is fairly rare.
Frequently after a company’s IPO, the price per share of the now-public company begins to increase as shares are available to be traded on a major stock exchange. This means that individual investors looking to jump in after the IPO will typically have to pay a higher price than the investors that took part in the initial public offering. However, this is not always the case. In some cases, the share price may go down after an initial public offering if analysts feel that the company is now overvalued. When this happens, the individual investors are exposed to less risk and may be able to buy shares at a discount to the IPO price.