![]() Do they have prior experience in the industry? How long have they been with the company? How much are they being paid? How well rounded is the board?ĭo your due diligence on them, including a Google search. The track record of those who are going to be in charge is vital. Take a close look at the list of people shown in the prospectus as directors and managers. Company specific risks can be found in the prospectus and should be considered prior to making an investment. The current market environment, number of competitors and quality of the product or service will all play a role in this. Given the broad range of companies across industries and the experience of each of these companies, understanding the risks associated with each business is an important step prior to investing. Investing in the stock market brings a certain level of risk. Keep in mind that the size of the market is only an estimate. ![]() The size of the opportunity and the company’s ability to capture market share can make all the difference when it comes to growth and shareholder returns. ![]() Once you understand the business, identifying the market opportunity is your next step. Companies should be clear in the prospectus about what their product or service is and the problem they are solving or the gap in the market they are filling. If you don’t understand the business then remember: it’s not you, it’s them. It is simple yet integral advice, and something to keep a close eye on when investing. If he can’t work out what a company is doing, he believes it is highly likely that lots of other people have the same difficulty – therefore he stays away. Investment guru Warren Buffett attributes his success partly to remaining within his “circle of competence”. Reading the IPO prospectus is always the best place to start, but understanding which parts are the most important will help you to break down the prospectus and make an informed investment decision. So, what questions should investors be asking before investing in an IPO, and how can investors avoid those that are not likely to succeed? Now, with OnMarket, retail and self-directed investors have the opportunity to access private capital raisings, listed placements and IPOs. Traditionally, IPOs were only offered to institutional and “high net worth” investor clients of brokers. What to look for before investing in IPOs Seven tips for investing in an Initial Public Offering
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