Clouded Judgement: IPO Process Overview & Pricing Mechanics

This article provides a comprehensive breakdown of the IPO process for SaaS companies, detailing six stages from investment bank selection through day-one trading, with particular focus on how IPO pricing ranges are set relative to comparable companies and why post-IPO pops occur. The analysis includes empirical data from 45 SaaS IPOs since 2018, revealing that most IPOs are priced at a discount to comparable public companies and that institutional investors capture disproportionate value through day-one gains. The author argues the current IPO process is inefficient and disadvantages companies and retail investors, while acknowledging the structural constraints (low float, lockup periods) that make perfect pricing difficult.