An initial public offering (IPO) is the process through which a private company offers its shares to the public for the first time. This allows the company to raise capital from investors, which can be used for expansion, paying off debt, or other business needs. Once the shares are sold, the company becomes publicly traded on a stock exchange, such as the New York Stock Exchange or NASDAQ. IPOs are often seen as a significant milestone for a company, as they provide access to a larger pool of investors. The process involves regulatory scrutiny and requires the company to disclose financial information, ensuring transparency for potential shareholders.