Direct Public Offering (DPO)

DPO or Direct Public Offering is an offering in which the company shares of stock are sold directly to investors, rather than through an underwriter. Using a DPO, the company can eliminate the cost associated with underwriters. It also eliminates the need to file the securities with the Securities Exchange Commission which can take a significant amount of time. Direct Public Offerings are a type of equity financing that is an alternative to debt financing. Instead of taking on debt by issuing debentures and other types of bonds to investors, a company can use the equity in the company to generate capital. One downside is the fact that ownership of the company has to be given up.