**2.6 Fourth stage of financing life cycle (last stage/public offering stage)**

The last stage is where the business has grown to a high level and needs funds for its future projects. Sources of finance are [10]:

	- *Initial public offering (IPO):* An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors [21] and usually also to individual investors [22]. An IPO is typically underwritten by one or more investment banks, who also arrange for the shares to be listed on one or more stock exchanges. Discounted cash flow (DCF) analysis and comparable firms' analysis can be used and a preliminary valuation may rely heavily on how the market is valuing comparable firms. In some cases, publicly-traded firms in the same line of business are easy to find. In other cases, it may be difficult to find publiclytraded "pure plays" to use for valuation purposes [23].
	- *Follow-on public offer (FPO):* Follow-on public offer refers to the issuing of shares to financial specialists by an organization that has been as of now recorded on trade [24]. FPO is a stock issue of supplementary shares made by an organization that has been now freely recorded and has experienced the IPO process. FPOs are known as a popular method for companies to raise additional value capital in the capital markets through a stock issue. Open organizations as a rule exploit FPO issuing, an offer available to be purchased by financial specialists, which is made through an offer document. FPOs and IPO are different one should not be confused between them as IPOs are the initial public offering of equity to the public while FPOs are supplementary issues made after a company has been established on an exchange.

◦ *Right issue of share:* Offer of securities by a listed company to those who are shareholders of the company as on the record date fixed for the said rights issue. Rights issues give existing shareholders the option of purchasing new shares, normally issued at a discount to the prevailing market price to encourage participation in the capital raised over purchasing shares in the market.

Startup businesses need to identify the appropriate type of financing to prevent themselves from the risks associated with funding options as the necessity is compelling over rationality. The more the entrepreneurs are aware of the advantages and disadvantages of the funding options, the sounder funding decisions will result. Although time is always a scarce resource that makes everyone rush with no limit, going forward and backward learning the pros and cons will pay you double in the future.
